R.S.M. Finserv Limited vs Income-tax Officer

Parties Involved

Facts Summary

For the assessment year 2017-18, the assessee, R.S.M. Finserv Limited, filed its return of income on 29.03.2018 declaring a loss of Rs. 14,91,289/-. The case was selected for complete scrutiny under CASS. The assessee did not respond to the statutory notices issued under sections 143(2) and 142(1) of the Income Tax Act 1961. During scrutiny assessment, the Assessing Officer observed that during the year under consideration, the assessee declared a loss of Rs. 14,91,289/- on a total turnover of Rs. 3,90,81,250/- from sale of products/goods, Rs. 96,94,328/- from sale of services, and Rs. 24,033/- from interest. The AO also observed that during the demonetization period, the assessee had cash deposits of Rs. 4,45,69,500/- in its bank account. The AO required the assessee to furnish details regarding cash deposits, but the assessee did not respond to the notices. The AO completed the assessment by adding Rs. 4,45,69,500/- under section 68 on account of unexplained cash deposits and Rs. 4,448/- being interest on income tax refund, treating the same as undisclosed income of the assessee. The assessee appealed to the Commissioner of Income-tax (Appeals), who dismissed the appeal by affirming the assessment order. The assessee then appealed to the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the addition made by the Assessing Officer on account of cash deposits during the demonetization period was justified.
• 2. Whether the Commissioner of Income-tax (Appeals) erred in dismissing the grounds of appeal on account of the absence of the appellant.

Judgment Outcome

Decided in favour of Assessee.

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