Trishan Forex Pvt. Ltd. vs. ACIT, Cir.-5(1), Kolkata

Parties Involved

Facts Summary

Trishan Forex Pvt. Ltd. was assessed for an amount of Rs. 25,45,379/- under Section 68 of the Income Tax Act, 1961, for raising share capital through unaccounted money. The company had raised share capital of Rs. 26,00,000/- during the financial year 2015-16. Out of this, Rs. 20,00,000/- were deposited in cash in different dates by the directors of the company and Rs. 17,00,000/- were immediately withdrawn by them in cash. The Assessing Officer (AO) found that the company had capitalized its unaccounted money by way of raising bogus share capital to evade tax. The appellant filed documents to support their contention that the amounts credited in the company’s accounts were justified and were in the nature of contribution by the three shareholders. However, the Commissioner of Income Tax (Appeals)-NFAC, Delhi confirmed the addition. The appellant appealed against this decision.…

Legal Issues

• 1. Whether the Ld. CIT(A) was justified in confirming the action of the A.O of making the addition of Rs. 25,27,359/- as unexplained cash credit by wrongly invoking the provisions of sec 68 of the Act.
• 2. Whether the addition of Rs. 25,45,379/- is incorrect inasmuch as framed on the inference drawn by the AO of cash deposit of Rs. 20,00,000/- in the bank account of the company which was unfounded.
• 3. Whether the CIT(A) erred in confirming the addition on sets of fact different from the AO.
• 4. Whether the CIT(A) ought to have accepted the explanation of the source of funds of the shareholders.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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