Revenue vs. Gandevi Commerce Pvt. Ltd.
Parties Involved
Facts Summary
The assessee, Gandevi Commerce Pvt. Ltd., had filed an income return for the Assessment Year 2016-17 declaring a total income of ₹49,40,880/-. The Assessing Officer (AO) initiated reassessment proceedings based on information suggesting that the assessee was a beneficiary of accommodation entries from a shell company, M/s. Saffire Exports & Agency Pvt. Ltd. The AO observed that the assessee had advanced a loan of ₹2,00,00,000/- to Saffire Exports & Agency Pvt. Ltd. and made an addition of ₹2,00,00,000/- as an unexplained loan under section 68 of the Income Tax Act, 1961. The assessee appealed to the Commissioner of Income Tax (Appeals)-NFAC, Delhi (CIT(A)), who partly allowed the appeal and deleted the addition made by the AO. The Revenue appealed to the Income Tax Appellate Tribunal (ITAT), Kolkata, which dismissed the appeal and confirmed the order of the CIT(A).…
Decision in favour of
Partly Assessee / Partly Revenue
Legal Issues
- 1. Whether the Ld. CIT(A) had failed to appreciate the fact that M/s. Saffire Exports & Agency Pvt. Ltd. is a shell company and any transaction executed with a shell company can be inferred as a sham transaction.
- 2. Whether the Ld. CIT(A) had failed to appreciate the fact that the assessee had advanced a loan of ₹2,00,00,000/- to Saffire Exports & Agency Pvt. Ltd. and the addition made under section 68 of the Act is not sustainable.
Judgment Outcome
Decided in favour of Partly Assessee / Partly Revenue.
Precedents Relied Upon
16 precedents cited in this judgement.
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