M/s. R.M. Bhuther and Co. Vs. National Faceless Appeal Centre

Parties Involved

Facts Summary

The assessee, M/s. R.M. Bhuther and Co., a partnership firm, filed its original return of income for the Assessment Year 2017-18 declaring total income at Rs.Nil. The return was processed under section 143(1) of the Income Tax Act, 1961. The case was selected for scrutiny, and notices under sections 143(2) and 142(1) were issued. The Assessing Officer observed that the assessee received unsecured loans amounting to Rs.126,67,39,656/- during the year. The AO sought details of ITR, bank statements, and confirmation letters of lenders. The AO confirmed that the assessee was unable to prove the identity and creditworthiness of some lenders and the genuineness of transactions aggregating to Rs.85,00,000/-. Consequently, the AO passed an assessment order dated 27.12.2019 under section 143(3) determining the total income at Rs.85,00,000/- after making an addition under section 68 of the Act. Aggrieved by this, the assessee appealed to the Commissioner of Income Tax (Appeals), who upheld the AO's addition on similar grounds. The assessee then appealed to the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the Ld. CIT has erred in confirming the Assessment Order passed by the Ld. AO under section 143(3) of the Income Tax Act which is against the principle of natural justice.
• 2. Whether the Ld. CIT has erred in confirming the addition of Rs.85,00,000/- as unexplained cash under section 68 read with section 115BBE despite relevant documents being submitted.
• 3. Whether the Ld. CIT has erred in confirming the application of Section 115BBE without establishing that the amount was undisclosed income.
• 4. Whether the Ld. CIT erred in confirming the order passed by the Ld. AO although the assessee has discharged its onus of proving the identity, genuineness and creditworthiness of the lenders.
• 5. Whether the Ld. CIT erred in confirming the charging of interest under section 234B of the Income Tax Act 1961.
• 6. Whether the Ld. CIT erred in upholding initiation of penalty proceeding under section 270A of the Income Tax Act 1961.

Judgment Outcome

Decided in favour of Assessee.

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