Sree Kumar Textiles Pvt. Ltd. vs. The Assistant Commissioner of Income Tax

Parties Involved

Facts Summary

The assessee, Sree Kumar Textiles Pvt. Ltd., did not file a return of income for the Assessment Year 2011-12. The Assistant Commissioner of Income-tax, Corporate Circle, Madurai, reopened the assessment under section 147 of the Income-tax Act, 1961, and completed the assessment exparte under section 144, adding Rs.46,88,891/- as income from other sources. The assessee filed an application under section 264 of the Act, pointing out that the assessee had adequate brought forward unabsorbed depreciation, but the AO omitted to set it off against the income of the recurrent year. The Principal Commissioner of Income Tax set aside the assessment and directed a reframe of the order. The assessee claimed that Rs.21 lakhs were transferred from the family members of the MD through banking channels and Rs.8 lakhs was redeposited after being transferred to the family members, hence not a fresh credit. The AO assessed the entire credits of Rs.37,10,000/- under the head other sources. The assessee appealed to the Commissioner of Income Tax (Appeals), who dismissed the appeal.…

Legal Issues

• 1. Addition of Rs.21,00,000/- representing amounts received through banking channels from the family members of the Managing Director.
• 2. Addition in respect of cash deposits of Rs.16,10,000/-.
• 3. Assessee's claim for set-off of brought forward unabsorbed depreciation available up to A.Y.2005-06 against the income determined for the year under consideration.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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