Shiv Marketing vs. Income tax Officer, Ward-4(2)

Parties Involved

Facts Summary

The assessee, Shiv Marketing, a partnership firm engaged in the business of blankets and related items, filed an income tax return for the Assessment Year 2017-18 declaring an income of Rs.1,99,960/-. The case was selected for scrutiny, and the Assessing Officer (AO) noticed that the assessee had not provided the PAN of its largest sundry creditor, M/s. Keshav Texo Fab. Based on the bank details, the AO found that the bank account was in the name of Mr. Rohit Bansal, and the assessee's name was not appearing as a sundry debtor in his Balance Sheet. Consequently, the AO made an addition of Rs.31,56,611/- under section 68 of the Income Tax Act, 1961, assessing the income at Rs.33,56,634/-. The assessee appealed to the Commissioner of Income-tax (Appeals) (CIT(A)), who confirmed the addition but noted that the AO had wrongly invoked section 68 instead of section 41(1) of the Act. The assessee further appealed to the Income Tax Appellate Tribunal (ITAT), challenging the addition.…

Legal Issues

• 1. Whether the addition of Rs.31,56,611/- made by the AO under section 68 of the Act is justified.
• 2. Whether the CIT(A) erred in invoking section 41(1) of the Act.

Judgment Outcome

Decided in favour of Assessee.

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