CALCUTTA HIGH COURT: AO CANNOT DRAW AN ADVERSE INFERENCE FOR MERE NON-RESPONSE FROM DIRECTORS TO NOTICES

The Calcutta High Court in the case Principal Commissioner of Income Tax Vs Atlantic Dealers Pvt. Ltd was deciding as to whether the addition made under Section 68 of the Income Tax Act, 1961, was justified or not.

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The Court in the case held that only because the directors failed to respond to the notices issued, the Assessing Officer could draw an adverse inference.

The bench comprising of Chief Justice T.S. Sivagnanam and Justice Hiranmay

Bhattacharyya in the case observed that the assessing officer failed to comment on the veracity or admissibility of any of the details or documents produced by the assessee to prove the identity, the creditworthiness of the share subscribers, and the genuineness of the transaction.