2018 (10) TMI 584 - AT - Income Tax

Addition under the head undisclosed transactions - assessee has been repeatedly stating that he has not undertaken any transportation work for M/s Impex Ferrotech Ltd. and has not issued the alleged bills - Held that - When the assessee has been repeatedly stating that he had never issued the alleged bills and that he had never undertaken any such transportation work nor received any payment for the same, the revenue authorities are bound to investigate the matter by summoning the persons in charge of M/s. Impex Ferrotech ltd. The genuineness of the bills have to be examined. No transporters payment can be blocked for more than two years without any rhyme or reason. If the alleged bills have nothing to do with the assessee, then suitable action should be taken under law against M/s. Impex Ferrotech Ltd. Thus this issue should be set aside to the file of the Assessing Officer, with a direction to investigate the matter and for discovering the truth. - Decided in favour of assessee for statistical purposes.

Summary

Issues:
Addition of undisclosed transactions in the assessment for the year 2012-13.

Analysis:
The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals) related to the Assessment Year 2012-13. The primary issue under consideration was the addition of ?13,30,797 under the head of "undisclosed transactions." The Assessing Officer raised this amount as undisclosed receipts in the income of the assessee after examining information obtained from M/s Impex Ferrotech Ltd. The assessee contended that he did not raise bills worth ?13,30,797 on M/s Impex Ferrotech Ltd. and had not undertaken any transportation work for them. The Commissioner rejected these arguments, leading the assessee to appeal.

Upon hearing the rival contentions and considering the facts and circumstances of the case, the Accountant Member held that the revenue authorities should investigate the matter further. The assessee consistently denied issuing the alleged bills and undertaking any transportation work for M/s Impex Ferrotech Ltd. The Accountant Member emphasized that no transporter can wait for more than two years without payment, highlighting the need for a thorough examination of the genuineness of the bills. It was suggested that suitable action should be taken against M/s Impex Ferrotech Ltd if the alleged bills were not related to the assessee. Consequently, the issue was directed to be set aside to the file of the Assessing Officer for a detailed investigation to uncover the truth.

In conclusion, the appeal of the assessee was allowed for statistical purposes, indicating that the matter required further investigation and clarification. The judgment emphasized the importance of verifying the authenticity of transactions and taking appropriate action based on the findings of the investigation.