R.N. Khemka Enterprises Private Ltd. vs. ITO, Ward 20

Parties Involved

Facts Summary

The assessee, R.N. Khemka Enterprises Private Ltd., filed its original return of income declaring income of Rs. 2,93,790/- for the assessment year 2017-18. A survey action was conducted on several entities, including Sarvroopey Vyapar Pvt Ltd, Shashi Sales & Marketing Pvt. Ltd, Astral Food Pvt Ltd, and Rabik Exports Ltd, based on information that these companies had received a huge amount of cash and deposited it in their respective bank accounts during the demonetization period. The survey found that two main persons, Smt. Rani Sharma and Shri Yashpal Gupta, were involved in providing accommodation entries of sale and purchase bills to various beneficiaries through paper entities. The assessing officer found that the assessee had taken unsecured loans from entities controlled by Shri Yashpal Gupta, which were treated as unexplained cash credit under Section 68 of the Income Tax Act.…

Legal Issues

• 1. Whether the order passed by the Commissioner of Income-tax (Appeals) is bad in law and not justified?
• 2. Whether the Commissioner of Income-tax (Appeals) erred in dismissing the appeal for non-prosecution?
• 3. Whether the reassessment proceedings were initiated without valid jurisdiction?
• 4. Whether the reassessment proceedings were initiated without independent application of mind?
• 5. Whether the reassessment proceedings were mechanically approved?
• 6. Whether the addition of Rs.4,31,80,000/- as unexplained cash credit is tenable?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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