9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (12) TMI 445 - AT - Income TaxAddition on net profit on account of alleged fake cash sales - CIT(A) deleted the addition - Held that - In AY 2009-10 assessee has not provided any relevant details on which AO could have made any inquiry of cash sales in contradistinction to facts of AY 2008-09 where assessee has provided the relevant details available with it including C forms issued by the parties. Therefore, for this year AO was handicapped in absence of any details and made addition of net profit u/s 68. Ld CIT (A) has deleted the addition based on his order for AY 2008-09 without appreciating that as compared to AY 2008-09 where assessee has furnished relevant details in AY 2009-10 assessee has not furnished any details except the amount of cash sales. Further, in this year there is no finding whether even CIT (A) has examined the sales and verified the books as he has done in AY 2008- 09.Therefore, in our opinion, CIT (A) has committed an error in deleting the addition for AY 2009-10 following his order in case of assessee for AY 2008-09 in absence of any details of cash sales and in absence of any inquiry made by CIT (A). Therefore, in the interest of justice, we set aside the appeal of AY 2009-10 back to the file of AO with a direction to inquire, verify, and deal with cash sales recorded by the assessee in accordance with law after affording sufficient and necessary opportunity of hearing to the assessee. - Decided in favour of revenue for statistical purposes.
Issues:
- Addition of net profit on alleged fake cash sales for AY 2008-09 and AY 2009-10. - Application of Section 80 IC of the Income Tax Act. - Discrepancies in details provided by the assessee regarding cash sales. - Validity of additions made by the Assessing Officer (AO) and subsequent deletion by the Commissioner of Income Tax (Appeals) (CIT (A)). - Comparison of facts and law for both assessment years. Analysis: 1. Addition of Net Profit on Alleged Fake Cash Sales: - The appeals by the revenue were against the deletion of additions of Rs. 17,00,296/- and Rs. 12,00,652/- for AY 2008-09 and AY 2009-10, respectively, on account of alleged fake cash sales. - The AO concluded that certain parties involved in cash sales were non-existent or had no substantial business dealings with the assessee, leading to the estimation of net profits and denial of Section 80 IC benefits. - The CIT (A) deleted the additions based on the evidence provided by the assessee, including sales details, bills, vouchers, and production of books of accounts, which were found to be in order. - The Tribunal confirmed the deletion of the addition for AY 2008-09 but set aside the decision for AY 2009-10 due to the lack of detailed information provided by the assessee, directing the AO to conduct further inquiry. 2. Application of Section 80 IC: - The assessee, engaged in manufacturing, was eligible for deduction under Section 80 IC of the Income Tax Act. - The eligibility for deduction was a crucial factor in determining the tax implications of the alleged fake cash sales. 3. Discrepancies in Details Provided by the Assessee: - Discrepancies arose regarding the details provided by the assessee concerning cash sales, with variations in the information submitted for AY 2008-09 and AY 2009-10. - The lack of comprehensive information for AY 2009-10 led to the reversal of the CIT (A)'s decision and a remand for further investigation. 4. Validity of Additions and Deletions: - The AO's additions based on comparative net profits and the subsequent deletions by the CIT (A) were scrutinized by the Tribunal. - The Tribunal upheld the CIT (A)'s decision for AY 2008-09 due to the adequacy of evidence provided by the assessee but reversed it for AY 2009-10 due to insufficient details. 5. Comparison of Facts and Law: - While the facts differed between the two assessment years, the approach to making additions and deletions was found to be similar. - The Tribunal analyzed each year separately, emphasizing the importance of providing complete and accurate information to support claims and deductions. This detailed analysis of the judgment highlights the key issues, legal interpretations, and decisions made by the authorities involved in the case of alleged fake cash sales for the respective assessment years.
|
