Saumyaa Fincap Vs. Asst. Unit. Income Tax Dept.

Parties Involved

Facts Summary

The assessee, Saumyaa Fincap, filed its return of income for the Assessment Year (A.Y.) 2015-16 declaring total income of Rs. 42,53,750/-. The Assessing Officer (AO) reopened the case based on information that the assessee had taken a bogus loan of Rs. 17,00,000/- from three entities. The AO treated the loan as unexplained cash credit and added it to the income. The assessee appealed against the order of the Commissioner of Income Tax (Appeals) (CIT(A)), which dismissed the appeal. The assessee argued that the reopening of the case was illegal and the addition made by the AO was unjust. The Tribunal considered the submissions and found that the nexus between the Sadhani brothers and the three persons from whom the loan was taken was established. However, the Tribunal allowed the appeal in part, deleting the addition made by the AO for the bogus loan as it was repaid in the next financial year.…

Legal Issues

• 1. Reopening of the case by the AO
• 2. Addition of Rs. 17,17,000/- on account of accommodation entry transactions

Judgment Outcome

Decided in favour of Assessee.

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