The court held that action against directors cannot be directly ...

Directors not liable u/s 179. Company can be proceeded against if struck off. Gift from NRI grandson not unexplained u/s 69A. Double addition avoided.

July 16, 2024

Case Laws     Income Tax     AT

The court held that action against directors cannot be directly taken u/s 179, and where the company's name is struck off, action can still be taken against the company as per law. The impugned order adding one-third of the credited amount as directors' income was set aside. The revenue can take appropriate action against the company. Regarding the gift received from an NRI grandson, it was held that the amount cannot be treated as income from unexplained sources u/s 69A, as section 56 was not invoked. The amount added in the grandson's hands cannot be added again in the assessee's hands, as it would lead to double addition. If treated as income u/s 68, the assessee must prove identity, genuineness, and capacity, which is satisfied as the source is the grandson's bank account. The addition u/ss 68 and 69A was directed to be deleted in favor of the assessee.

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