TaxTMI 
TaxTMI 
TaxTMI 
2021 (10) TMI 684
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....enue, thought of selecting the case for scrutiny under CASS (Computer Aided Scrutiny Selection) for the verification of transactions. Accordingly, notice under Section 143(2) of the Income Tax Act, [in short 'the Act'] dated 22.09.2019 was issued. Notice under Section 142(1) of the Act also along with the questionnaire, was issued on 28.12.2020, and the response was directed to be made on or before 06.01.2021. 3.In response to the same, the Assessee submitted documents as well as information, vide their submission, dated 12.01.2021. Thereafter, notice under Section 142(1) was issued dated 03.02.2021 and 04.02.2021 to the Assessee, fixing the date of compliance on 08.02.2021. 4.Since the Assessee seems to have given certain sources for unsecured credit, notice were given under Section 133(6), to the assessee and to the lenders, who claimed to have given unsecured loan or credit to the Assessee. The Assessee filed further submissions on 07.02.2021 and 08.02.2021, which were considered by the revenue. 5.After considering the reply or submissions made by the Assessee, the revenue has come to the conclusion that, insofar as the unsecured credit claimed by the Assessee is conc....
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....evenue also seems to have found that the said lender , namely, Sri Nagalainga Vilas Oil Mill also filed ITR on the total income of only Rs. 1,34,580/-, however, it claimed to have given unsecured loan to the Assessee amounting to Rs. 41,34,69,610/-. 9.In view of these revelations, the revenue thought of invoking Section 68 of the Act, and accordingly, the revenue issued a show cause notice on 31.05.2021, proposing an addition of the said Rs. 41,34,69,610/- under Section 68 of the Act, on account of the unsecured loan taken from Sri Nagalainga Vilas Oil Mills, that is, one of the lenders and asked the show cause. In response to the same, Assessee filed submissions dated 02.07.2021, 14.07.2021 and 07.08.2021 and it has also raised objections on the proposed addition. 10.These objections and the reply given by the Assessee in response to the notice proposing to make such addition, were considered by the revenue, and ultimately, the revenue has come to the conclusion that the said sum of Rs. 41,34,69,610/- taken during the year as unsecured loan from Sri Nagalinga Vilas Oil Mill, is to be added to the total income of the Assessee under Section 68 of the Act, and accordingly, the asse....
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....limited prayer, the petitioner/Assessee has approached this Court, knowing well that it has got an appeal remedy. 15.I have also heard Mrs.S.Srimathy, learned Standing Counsel appearing for the respondent Income Tax Department, who would submit that, though a huge amount to the extent of more than 40 crores was claimed to have been accepted by way of unsecured credit or loan from a third party, which claimed to be a sister concern, however, the lender has shown the total income of the relevant year only to the extent of 1,35,580/- rupees, therefore, these transaction can very well be brought under Section 68 of the Act, and in this context, the genuineness and credit worthiness of the lender has to be examined. 16.Therefore, after invoking the power under Section 68, the genuineness and credit-worthiness of the lender was assessed and examined by scrutinizing the documents submitted both by the Assessee as well as the lender , and thereafter only, after thorough scrutiny, the revenue has come to the conclusion that, the said amount of more than 40 Crores rupees, has to be added in the account of the petitioner/Assessee as an additional income. 17.In this context, learned Standin....
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....ted by Mr.R.V.Easwar, learned Senior counsel appearing for the petitioner/Assessee, by stating the reason that, though notices have been given, response have been received from the Assessee, in order to explain through the documents produced to establish that the transactions in question was genuine transaction, there must be a personal hearing, which could have been asked by the Assessee, but, due to the change of procedure under Faceless Assessment Scheme, under which the present assessment has been made, the petitioner/Assessee, inadvertently, has missed it. 22.Apart from this reason, no other ground has been urged, no other reason has been stated and no other plea has been made by the learned Senior counsel appearing for the petitioner/Assessee warranting interference of this Court. 23.Therefore, insofar as the merits of the case is concerned, this Court need not traverse and those issues can once again be gone into by the assessing authority, if the matter is remitted back to them, on the sole ground of alleged violation of principles of natural justice. 24.Here in the case in hand, as pointed out by the learned Senior counsel, a huge sum has been added in the income of the....