Ramesh Tagraj Sanghvi Vs. ITO-19(3)(1)

Parties Involved

Facts Summary

The assessee, Ramesh Tagraj Sanghvi, engaged in the business of trading in ferrous and non-ferrous materials under the name of M/s Remi Steel (India), filed returns of income for the years 2013-14 and 2015-16. The returns were selected for scrutiny, and the Assessing Officer observed unsecured loans of Rs.69,50,000/- at the year end. The Assessing Officer issued summons under section 131 of the Income Tax Act, 1961 to all the parties, out of which all attended except one. The Assessing Officer treated the unsecured loans as unexplained cash credit under section 68 of the Act. The assessee appealed against the order, claiming that the loans were from related parties and were in the normal course of business. The Commissioner of Income Tax (Appeals) upheld the addition. The assessee further appealed to the Income Tax Appellate Tribunal (ITAT).…

Legal Issues

• 1. Whether the Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs.69,50,000/- under section 68 of the Income Tax Act, 1961 treating the unsecured loans as unexplained cash credit.
• 2. Whether the order made under section 143(3) of the Act by the Assessing Officer is bad-in-law, ultra vires and without appreciating the facts and law in their proper perspective.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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