2020 (11) TMI 368 - AT - Income Tax

Unexplained cash sales - AO in his affidavit has given a statement under oath that, there has been no sales outside the books, and that, books were audited that were filed before authorities below - HELD THAT - In assessment order passed, we note that, assessing officer has not provided bifurcations of cash sales added as unaccounted in books of account. AO has not provided details of impugned addition for years under consideration in the assessment order passed.AO has also not recorded details of alleged cash sales from sales register that was unaccounted by assessee. The issue needs to be remanded to Ld.AO with a direction to provide details of impugned additions for relevant assessment years were identified by Ld.AO to be unaccounted in the books of account. Assessee is directed explain the cash sales found in the sales register alleged to be unaccounted with supportive documents. Ld.AO is directed to pass a detailed order after considering the material is filed by assessee in support of its claim in accordance with law. - Decide in favour of assessee for statistical purposes.

Summary

Issues:
Appeal against assessment orders for multiple years, challenge to reopening of assessment, addition on account of unexplained cash sales.

Analysis:
The appellant filed appeals against orders passed by the Ld.CIT(A) for assessment years 2011-12 to 2014-15. The appellant's representative argued that the issues raised were common and identical across all years. It was noted that the assessment orders for all years were passed under section 143(3) read with section 148 of the Income Tax Act. The appellant contested the reopening of assessments as being bad in law, but later withdrew this ground of appeal.

Regarding grounds 3-7, which related to additions on account of unexplained cash sales, the appellant's representative argued that the facts were similar for all years. The Ld.CIT(A) had confirmed the additions, stating that the representative had consented to them before the assessing officer. The appellant submitted an affidavit from the representative, claiming that the consent was given to avoid disputes. The assessing officer did not reject the books of accounts but concluded that certain cash sales were unaccounted for without providing specific details.

The Tribunal observed that the assessing officer did not provide details of the alleged unaccounted cash sales in the assessment orders. It was noted that the representative had stated under oath that there were no sales outside the books. The Tribunal directed the assessing officer to furnish details of the additions identified as unaccounted cash sales and instructed the appellant to explain these sales with supporting documents. The assessing officer was directed to pass a detailed order after considering the appellant's submissions and evidence.

The Tribunal emphasized that the appellant must be given a proper opportunity to be heard. Therefore, grounds 3-7 raised by the appellant for all years were allowed for statistical purposes. The appeal was partly allowed, and the order was pronounced in open court on 21st October 2020.