This document provides a detailed analysis of the Income Tax Appellate Tribunal’s decision in ITA No. 1302/DEL/2020 concerning Garima Polymers Pvt. Ltd. against the ACIT, Central Circle-16, New Delhi, for the assessment year 2009-10.
The appellant, Garima Polymers Pvt. Ltd., filed an appeal against the order of the CIT(A)-23, New Delhi, challenging the validity of the assessment under section 144 and the additions made by the assessing officer. The primary issues revolve around unexplained share application money and unsecured loans.
During the proceedings, it was revealed that due to non-compliance with statutory notices, an ex-parte assessment order was issued. The ITAT previously remanded the case for a fresh assessment, directing the AO to verify creditor confirmations. Despite efforts, significant discrepancies were noted by the AO regarding the authenticity of the financial transactions and the creditworthiness of the creditors, leading to substantial additions.
The Tribunal examined the remand report and the subsequent assessment, focusing on the discrepancies and alleged unverifiable transactions reported by the AO. It was noted that the AO made additions based on unexplained share application money and unsecured loans due to insufficient compliance and failure to verify the transactions adequately.
The Tribunal acknowledged the complexity of the case, given the conflicting findings between different assessment years and the non-compliance by the creditors to summons. After reviewing the submissions and evidence, the Tribunal upheld the addition related to the share application money but provided relief concerning the unsecured loans, citing the assessee’s partial success in substantiating the transactions.
The decision in ITA No. 1302/DEL/2020 highlights the critical role of compliance and proper record-keeping in substantiating financial transactions in tax assessments. It underscores the necessity for taxpayers to maintain robust documentation to defend against additions made by the AO during assessments.
Analysis of ITA No. 1302/DEL/2020: Garima Polymers Pvt. Ltd. vs ACIT, Central Circle-16, New Delhi
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