Packaging Manufacturer — Defending a ₹2.3 Crore Income Tax Scrutiny Notice
A third-generation family business faced a scrutiny notice questioning ₹2.3 crore in unsecured loans, with a fifteen-day window to respond. NDSA's litigation team reconstructed the entire loan trail and defended every rupee — with no addition made.
A scrutiny notice, and fifteen days to answer
A third-generation packaging manufacturer received an income tax scrutiny notice questioning ₹2.3 crore in unsecured loans taken from related parties and group companies over several years. The assessing officer wanted proof of identity, creditworthiness, and genuineness for every lender, with a response window of just fifteen days.
The family had never been through scrutiny before, and the prospect of the entire amount being treated as unexplained income — with tax and penalty to follow — was alarming.
Reconstructing the loan trail, lender by lender
NDSA's litigation team took over within 48 hours of the notice landing. We reconstructed the complete loan trail — lender bank statements, ITRs, loan confirmations, and board resolutions — and built a documented case establishing each lender's identity, capacity, and the genuineness of the transaction.
We drafted a detailed written submission supported by relevant case law and represented the family at every hearing before the assessing officer.
"A scrutiny notice is unsettling, but it's rarely indefensible — what decides the outcome is documentation and how fast you respond. NDSA's litigation team brings both."
Assessment closed with no addition made
The assessment was completed with no addition made — the entire ₹2.3 crore loan trail was accepted as genuine, and the family avoided what could have been a significant tax and penalty outgo.
We also helped tighten their loan documentation and lender KYC going forward, so the next scrutiny, if it comes, is a formality rather than a fire drill.
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