Sanga Automobiles (P) Ltd. vs. ACIT

Parties Involved

Facts Summary

The assessee, Sanga Automobiles (P) Ltd., filed an income tax return for the assessment year 2017-18 on 05.03.2018, declaring a total income of Rs. 2,07,08,990/-. The case was selected for scrutiny under CASS, and various notices were issued under sections 143(2) and 142(1) of the Income Tax Act, 1961. The assessee did not provide complete details and information as per the notices, leading to a final show cause notice under section 144 of the Act. The Assessing Officer (AO) proposed to add rent received from ICICI Lombard General Insurance amounting to Rs. 22,26,825/- and disallow 10% of expenses under the heads Workmen and staff welfare and Discount, amounting to Rs. 4,28,880/-. Additionally, cash deposits made during the de-monetization period amounting to Rs. 1,58,70,374/- were treated as unexplained cash credit under section 68 of the Act. The assessee did not comply with the notices, and the AO passed an order under section 144. The assessee filed an appeal before the Commissioner of Income Tax (Appeals) (CIT(A)), which was dismissed ex-parte due to non-compliance. The assessee then filed an appeal before the Income Tax Appellate Tribunal (ITAT), challenging the disallowance of expenses, addition of rent, and treatment of cash deposits as unexplained cash credit.…

Legal Issues

• 1. Disallowance of 10% of expenses under the heads Workmen and staff welfare and Discount.
• 2. Addition of rent received from ICICI Lombard General Insurance amounting to Rs. 22,26,825/-
• 3. Treatment of cash deposits made during the de-monetization period as unexplained cash credit.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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