WALLSTREET FINANCE LTD.,MUMBAI vs. DCIT 13 (3)(1), MUMBAI

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ITA 3938/MUM/2019Status: DisposedITAT Mumbai29 July 2021AY 2010-116 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had provided sufficient evidence, including IENPL's request letters for foreign currency, invoices, and ledger accounts, to demonstrate that the amount represented sales of foreign currency. The Tribunal found that the credit could not be termed as an unexplained cash credit and directed the AO to recompute the income.

What were the facts?

The assessee, a foreign currency dealer, received Rs. 25.03 Lacs from Shri Hansraj Yadav. The Assessing Officer reopened the assessment and added this amount as an unexplained cash credit, as the assessee initially failed to provide a satisfactory explanation. The assessee claimed the amount was for the sale of foreign currency to Indian Express Newspaper Ltd. (IENPL), with Shri Hansraj Yadav acting as an intermediary.

What were the issues?

Whether the reopening of assessment was valid and if the credit received from Shri Hansraj Yadav constituted an unexplained cash credit or represented genuine business sales.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G” BENCH, MUMBAI

Before: JUSTICE SHRI P. P. BHATT & SHRI MANOJ KUMAR AGGARWAL, AM

For Appellant: Shri Madhur Agarwal, Ld. AR
For Respondent: Shri T.S. Khalsa, Ld. DR

BEFORE JUSTICE SHRI P. P. BHATT, PRESIDENT AND SHRI MANOJ KUMAR AGGARWAL, AM (Hearing through Video Conferencing Mode) आयकरअपील सं./ (धििाारण वर्ा / Assessment Year: 2010-11) M/s Wallstreet Finance Ltd. DCIT – 13(3)(1) Chintamani Plaza, Office No. 113-122 R. No. 229, M. K. Road, बिाम/ 1st floor, A-Wing, CTS No. 294C, Aaykar Bhavan, Vs. Andheri Kurla Road, Chakala Mumbai-400 020 Andheri (East), Mumbai-400 099. स्थायीलेखासं./ जीआइआरसं./ PAN/GIR No. AAACW-1258-P (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : Assessee by : Shri Madhur Agarwal, Ld. AR Revenue by : Shri T.S. Khalsa, Ld. DR सुनवाई की तारीख/ : 29/06/2021 Date of Hearing घोषणा की तारीख / : 29/07/2021 Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2010-11 arises out of the order of learned Commissioner of Income-Tax (Appeals)-21, Mumbai [CIT(A)], dated 05/03/2019 in the matter of assessment framed by Ld. Assessing Officer (AO) u/s 143(3) on 05/12/2017. The grounds raised by the assessee read as under: -

1. The learned Commissioner of Income Tax (Appeals) erred in confirming the reopening of assessment u/s. 147 of the IT Act made by the assessing officer.

2. The learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs.25,03,023 u/s. 68 of the ITA erroneously invoked by the 2 M/s Wall Street Finance Limited Assessment Year: 2010-11 assessing officer without appreciating that the said sums were sales of the appellant.

3. The learned Commissioner of Income Tax (Appeals) failed to appreciate that appellant has in its course of business of buying and selling foreign currency accounted the receipt from Mr. Hansraj Yadav as sale of currency, for which there was a corresponding purchase, and it was not a case of cash credit in books.

2.

We have carefully heard the rival submissions and perused relevant material on record including documents as placed in the paper book. Our adjudication to the subject matter of appeal would be as given in succeeding paragraphs. 3.1 The material facts are that the assessee being resident corporate assessee is stated to be engaged as foreign currency dealer. The original return of income was scrutinized u/s 143(3) on 29/12/2012. However, the case was reopened and another assessment was framed u/s 143(3) r.w.s. 147 on 05/12/2017 wherein the assessee was saddled with impugned additions u/s 68 for Rs.25.03 Lacs. 3.2 The case was reopened since information was received from ITO- 35(1)(4), Mumbai that during the course of certain appellate proceedings, Ld. CIT(A) had sought enquiry report with regard to nature and purpose of payments made by one Shri Hansraj Yadav from his bank account to the assessee for Rs.25.03 Lacs. Notice u/s 133(6) was issued by Ld. AO to the assessee specifically asking the assessee to furnish the particulars of amount received from Shri Hansraj Yadav, nature & purpose of payment received, ledger copy etc. However, the assessee had not submitted any reply and therefore an opinion was formed that the said amount as received by the assessee remained unexplained cash credit in its hand. Accordingly, the case was reopened

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