The director cannot be held responsible for the unrecognized income of the company: Income Tax Appellate Tribunal, Mumbai.
In ITAT’s most recent case, Mumbai Bench, the tribunal ruled that the executive director is not liable for the company’s undisclosed and unrecognized earnings. According to the facts, the managing director of the company M / s VNR Infrastructure Limited. During the search of the company and its directors, certain incriminating material was found against the company. According to the company’s general manager, there has been a tremendous amount of spending that has not been disclosed by the company.
In the further hearing, the auditor also asserted that the CIT (A) had committed errors of law and factual errors when it reversed the auditor’s measures to add up the expenditure and income that were not recorded. All statements made by the assessing officer, directors, assessees and others have been recorded accordingly. The review of Cit (A) shows that there are any duplicate additions of undisclosed expenses and undisclosed income (see above) contested in the case of the M / s. The VNR Infrastructure Limited Assessee company was only removed for the reason that it was properly assessed.
After hearing all of the objections, the Tribunal ruled that the CIT (A) had withdrawn such twin supplements in the hands of the evaluator / individual as his M / s correct. VNR Infrastructure Limited, which operates the market on its own behalf, is responsible for the related unknown and unconfirmed revenues. ITAT made it clear that the revenues didn’t even show the fact that the profits themselves exceeded the company’s valuation.