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| The Tax Publishers2020 TaxPub(DT) 3622 (Bang-Trib) INCOME TAX ACT, 1961
Section 143(3)
Where assessee was running its operation through a website with domain name www.urbantouch.com and under brand name 'Urban Touch', AO was not justified in making addition alleging that assessee received an amount of USD 30 million as proceeds for sale of Urban Touch, because neither assessee nor investors received said amount and same was reported in news articles relied upon by AO without carrying out adequate due diligence and without being ratified by assessee or investors.
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Assessment - Addition to income - Undisclosed gains from alleged sale of brand name of assessee 'Urban touch' -
Assessee was engaged in business of software development and providing service and sales of products through end to end business transaction . It was conducting its business operation through a website with domain name www.urbantouch.com and under brand name 'Urban Touch'. AO made addition in relation to undisclosed income earned by assessee receiving an amount of USD 30 million as proceeds for sale of Urban Touch.Held: Neither assessee nor investors received said amount of USD 30 million. Amount was reported in news articles relied upon by AO without carrying out adequate due diligence and without being ratified by assessee or investors. In view of aforesaid factual situation, assessment in instant case was concluded based on a news article which did not, in any case constitute adequate material on record. Accordingly, addition made by AO was liable to be deleted.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2013-14
IN THE ITAT, BANGALORE 'A'' BENCH
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