The Raipur bench of the Income Tax Appellate Tribunal (ITAT) directed re-adjudication to the assessing officer for making the addition to Income that was already declared in Income Disclosure Scheme,2016.
Ravi Kedia, the appellant assessee appealed against the order passed by the Commissioner of Income Tax (Appeals) for confirming the addition made by the assessing officer under section 143(3) read with section 147 of the Income Tax Act,1961.
Abhishek Mahawar, the counsel for the assessee contended that the addition made by the assessing officer as regards the bogus/unsubstantiated purchases was highly exorbitant, and the same was liable to be restricted to the extent of difference in the gross profit of genuine purchase transactions as against that of bogus/unverified purchase transactions.
It was also submitted that the addition towards bogus/unproved purchases made by the Assessing officer while framing the assessment, in the backdrop of such purchases/gross profit (to the extent relatable to bogus/unproved purchases) had been subjected to tax under Income Disclosure Scheme had thus resulted to double taxation in the hands of the assessee.
Piyush Tripathi, the counsel for the revenue strongly opposed the contentions made by the counsel of the assessee. It was also submitted that the addition made to the Income by the assessing officer was under the law and is not liable to be deleted.
The ITAT bench observed that once a declaration made by the assessee under Income Declaration Scheme (IDS) had been accepted by Principal Commissioner and such authority was thereafter estopped from taking any steps which would in effect amount to reopening and/or revising the decision already taken on such declaration.
It was also observed that restricting the addition to the extent of the difference between the gross profit of genuine purchases transactions and gross profit of bogus purchases transactions would be reduced on a pro-rata basis, i.e to the extent such gross profit was attributable to bogus/unverified purchase transactions
A single-member bench comprising Ravish Sood(Judicial) held that the assessee had declared part of the bogus purchases/gross profit of his regular business transactions in the IDS and the same could not have been once again subjected to tax by the Assessing officer and directed re-adjudication to the assessing officer while allowing the appeal filed by the assessee.
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