| Question And Answer | |
|---|---|
| Subject: | Applicability of Sec 68 of I.T. Act, 1961 |
| Category: | Income-Tax |
| Querist: | CA Govind Agrawal |
| Answered by: | Research Team |
| Tags: | cash credits, Reassessment, Section 68 |
| Date: | December 24, 2023 |
Appellant has given loan of Rs. 30,00,000/- in F.Y. 2008-09 to ABC through banking channels.
Just before the debit of Rs. 30,00,000/- there is a credit in the bank A/c on account of repayment of loan received by the Appellant from his debtor which was given two years back through banking channels.
Interest on the said amount and TDS thereon is reflected in Form 26AS and shown in ITR.
On the basis of search in the case of ABC it was concluded by the Investigation wing that the loan of Rs. 30,00,000/- is accomodation entry.
Notice u/s 148 was issued and reassessment was completed making addition of Rs. 30,00,000/- on the ground that assessee failed to prove three ingredients u/s 68
Query
- As regards reasssessment whether only on the basis of borrowed satisfaction of investigation wing reassessment proceedings are valid?
- Whether Notice u/s 148 instead of 153C in the case of third person for search prior to 01-04-2021 is valid?
- Whether addition of Rs. 30,00,000/- on the ground that the assessee failed to prove the three ingrediants of sec 68 in respect of repayment of loan received from the debtor is valid particularly in view of the fact that repayment was received from debtor?
One has to read the satisfaction noted by the Assessing Officer while passing the order under section 148A(b) of the Act . The objection raised by the Assessee and order disposing the objection under section 148A(d) of the Act. If the order under section 148A(d ) is not following the due process of law , the assessee may challenge the said order by filing the writ before the High Court . One may have to study the facts to decide whether it is a fit case for writ .