2023 (6) TMI 1413 - AT - Income Tax

ITAT remands case to CIT(A) for fresh adjudication on cash additions and Section 80C disallowance issues

Assistant Commissioner of Income-tax, Central Circle-3, Patna Versus Rishav Dutta

Assistant Commissioner of Income-tax, Central Circle-3, Patna Versus Rishav Dutta - TMI Issues:1. Addition of unaccounted cash and stock during survey, and disallowance of deduction under section 80C.2. Addition of unexplained cash credit due to difference in bank account entries and gross sales.3. Admissibility of fresh evidence without providing opportunity to Assessing Officer.4. Compliance with Income Computation and Disclosure Standard (ICDS) in revenue recognition.Analysis:Issue 1:The Revenue challenged the CIT(A)'s deletion of additions made under unaccounted cash and stock found during a survey, and disallowance of deduction under section 80C. The CIT(A) allowed the claims based on the documents produced by the assessee during the appeal, including books of account and confirmation letters. However, the Tribunal found that the CIT(A) should have given an opportunity to the Assessing Officer to examine these documents before making a decision. The matter was remitted back to the CIT(A) for fresh adjudication after providing a reasonable opportunity to both parties.Issue 2:The Revenue contested the deletion of an addition made by the Assessing Officer towards unexplained cash credit, attributed to the difference in bank account entries and gross sales. The CIT(A) accepted the assessee's explanation that the difference was due to VAT/GST collection. However, the Tribunal noted that the CIT(A) did not consider the Income Computation and Disclosure Standard (ICDS) requirements for revenue recognition. The matter was remitted back to the CIT(A) for reconsideration in light of the relevant provisions.Issue 3:The Revenue raised a concern about the admissibility of fresh evidence without providing an opportunity to the Assessing Officer to examine it, as required by Rule 46A of the Income-tax Rules, 1962. The Tribunal found merit in this argument and remitted the issue back to the CIT(A) for proper consideration after allowing both parties a reasonable opportunity to present their case.Issue 4:The Revenue argued that the CIT(A) did not consider the provisions of section 145 and 145A(ii) along with ICDS IV for revenue recognition. The Tribunal agreed and remitted the matter back to the CIT(A) for a fresh adjudication, directing both parties to have a fair opportunity to present their arguments. The decision was made in the interest of justice and compliance with the applicable standards.In conclusion, the Tribunal allowed the Revenue's appeal for statistical purposes, remitting all the issues back to the CIT(A) for reconsideration while emphasizing the importance of providing a fair opportunity to both parties and ensuring compliance with relevant legal provisions.