#Shell Companies

ITAT Kolkata rules that repayment of loans in subsequent years discharges the assessee's burden under Section 68 of the Income Tax Act, setting aside an unexplained cash credit addition of ₹1.4 crore. The ruling clarifies that delayed repayments do not automatically trigger Section 68 additions, providing relief to taxpayers facing shell company allegations.

ITAT Delhi holds that under Section 68 of the Income Tax Act, the assessee must establish the identity, creditworthiness, and genuineness of creditors to avoid additions. The Tribunal deleted a Rs. 1.75 crore addition after the assessee proved a collaboration agreement and refund, setting a precedent for reassessment proceedings involving shell companies and unexplained credits.

ITAT Kolkata rules that when creditors are shell companies with untraceable directors, the assessee must provide substantive evidence beyond paper submissions to discharge the burden of proof for unexplained loans and corresponding interest expenses. The tribunal reinstated additions of ₹13.83 crore under Section 68 and ₹88.19 lakh under Section 69C, setting a precedent for stricter scrutiny in tax disputes involving shell entities.

Gauhati High Court rules that allegations of fraud, shell company operations, and GST evasion warrant criminal investigation under Section 154 CrPC, irrespective of parallel civil or arbitral proceedings. The judgment reinforces that economic offences with public interest implications demand independent police scrutiny to prevent abuse of process.

ITAT Delhi holds that payments to paper entities for bogus purchases are taxable as unexplained expenditure under Section 69C in the year of payment, not the year of original purchase.