Appeal allowed under Income Tax Act section 68 for assessment year 2017-18

The appeal challenging the addition of Rs. 46,39,000 by the Assistant Commissioner of Income-tax under section 68 of the Income Tax Act for the assessment year 2017-18 was allowed for statistical purposes. The Judicial Member directed the Assessing Officer to verify the correctness of the claim regarding cash sales made to specific parties and assess the status of their assessments. The impugned order was set aside, and the assessment was restored to the AO for further examination.

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Issues:
The judgment involves the addition of Rs. 46,39,000 made by the Assistant Commissioner of Income-tax under section 68 of the Income tax Act, 1961 for the assessment year 2017-18.

Summary:

Ground of Appeal:
The appeal challenges the addition of Rs. 46,39,000 made by the Assistant Commissioner of Income-tax under section 68 of the Income tax Act, 1961 for the assessment year 2017-18.

Facts:
The case involved the filing of a return declaring income of Rs. 3,50,350, selected for scrutiny assessment, and an addition of Rs. 46,39,000 in cash sales made to Fashion King Garments Ltd. and Ganesh Enterprises. The Commissioner of Income-tax (Appeals) upheld the addition, leading to the current appeal.

Arguments:
The counsel for the assessee argued that the authorities were unjustified in sustaining the additions, emphasizing that the assessee was not given a fair opportunity to explain and provide necessary confirmations from the parties involved. The counsel highlighted that the parties had confirmed their accounts and that TCS provisions were applicable to the sales made by the assessee.

Decision:
After considering the contentions, the Judicial Member noted that the AO did not provide findings regarding the purchases in the assessment order and that the firms in question were reported as closed. The Member directed the AO to verify the correctness of the claim that the assessee made cash sales to the mentioned parties and to assess the status of their assessments. The impugned order was set aside, and the assessment was restored to the AO for further examination. The appeal was allowed for statistical purposes.

Conclusion:
The appeal was allowed for statistical purposes, and the order was pronounced in open court on 31st July, 2023.

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