2023 (5) TMI 1110 - AT - Income Tax

Tribunal upholds CIT(A) decision on genuine sales under Income Tax Act sec 68

The Tribunal upheld the Ld. CIT(A)'s decision to delete the addition made u/s 68 of the Income Tax Act, as the sales were found to be genuine with ... Addition u/s 68 - sales made by the assessee to five parties assessed as income of the assessee - CIT-A deleted addition - HELD THAT:- No infirmity in the order passed by the Ld.CIT(A) in holding that the sales cannot be added u/s 68 unless they are proved as bogus on the basis of some reliable evidences. Decided against revenue. Issues:The main issue in this case is whether the sales made by the assessee to five parties can be assessed as income u/s 68 of the Income Tax Act.Details of the Judgment:The appeal was filed by the Revenue against the order of the Ld. Commissioner of Income Tax (Appeals) for the AY 2018-19, where the addition of Rs.2,12,14,164/- made u/s 68 of the Act was deleted.The assessee had filed his return of income declaring Rs.45,88,710/- for the assessment year. During the assessment proceedings, the assessee was required to furnish details of sales made to various parties. The AO made an addition u/s 68 as the assessee could not submit PAN details for certain parties. However, the Ld. CIT(A) deleted this addition.The Ld. Counsel for the assessee argued that the total sales made were Rs.23,43,48,801/-, supported by audited balance sheets. The counsel contended that since purchases and profits were accepted by the AO, there was no reason to doubt the sales. The payments from the parties were received through banking channels, and VAT was paid on these sales.The Ld. CIT(A) considered the evidence furnished by the assessee and the AO's observations, and deleted the addition u/s 68. It was noted that the sales were genuine, payments were received via banking channels, and VAT was paid. The Ld. CIT(A) held that sales cannot be added u/s 68 unless proven as bogus with reliable evidence.After careful consideration, the Tribunal upheld the Ld. CIT(A)'s decision, stating that sales cannot be added u/s 68 without reliable evidence. The appeal of the Revenue was dismissed, and the order was pronounced on 25.05.2023.