Redlily Enterprises Pvt. Limited

Parties Involved

Facts Summary

The assessee, Redlily Enterprises Pvt. Limited, filed its return of income for the assessment year 2013-14 declaring a loss of Rs.2,83,048/-. The case was selected for scrutiny, and the assessment under section 143(3) of the Act was completed on 29.01.2016, determining the total income at Rs.32,54,270/- on account of addition of Rs.35,27,322/- under section 14A of the Act. Aggrieved by the order of the Assessing Officer, the assessee appealed to the CIT(Appeals), which allowed the appeal. Subsequently, the case was selected for reassessment under section 147 of the Income Tax Act, 1961, on the issue of escapement of income to the tune of Rs.30,00,000/-. The Assessing Officer made an addition of Rs.30,00,000/- under section 68 of the Act as unexplained cash credit for the impugned assessment year, since the assessee failed to file the relevant documents and details to prove the identity and genuineness of the transactions. The CIT(Appeals) confirmed the addition, leading the assessee to appeal before the ITAT.…

Legal Issues

• 1. Whether the Assessing Officer and CIT(Appeals) correctly relied on information provided by the DDIT (INV) without independently reviewing the appellant's disclosure of share purchases in an earlier year.
• 2. Whether the addition of Rs.30,00,000/- as income under section 68 of the Act was correctly made despite the appellant providing substantial evidence of the sale of shares.
• 3. Whether the addition under section 68 of the Act on account of the sale of shares is warranted given that the purchase of shares was not disputed.

Judgment Outcome

Decided in favour of Assessee.

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