The Bangalore bench of the Income Tax Appellate Tribunal(ITAT) set aside the addition made under the Income Tax Act, 1961 in the absence of corroborative Evidence.
M/s. Yashaswi Fish Meal and Oil Company, the assessee has filed a return of income and they are either subject to processing of return u/s 143(1) of the Income-tax Act,1961 [‘the Act’ ] or assessment of the income u/s 143 of the Act. The assessment order for all these assessment years was framed u/s 143(3) r.w.s. 147 of the Act.
It was contended that the reassessment order is bad in law and void-ab-initio for want of requisite jurisdiction especially, since the mandatory requirement to assume jurisdiction u/s 148 of the Act did not exist and has not been complied with and consequently, the re-assessment order requires to quashed.
There was no material found in the course of the survey to make any addition for the years under appeal and the addition made by placing reliance on the statement given at the time of the survey that the said statement has been retracted by the assessee within a reasonable time and explained to the authorities concerned that statement recorded was erroneous and no reliance could be placed upon the same for making reopening the assessment or making any addition.
The notice u/s 148 of the Act has been issued in all these assessment years based on material collected during survey proceedings u/s 133A of the Act conducted on 8.2.2018. During the survey proceedings, a statement was recorded from Uday Kumar Salian, one of the partners of the firm. In his statement recorded u/s 131 of the Act, he confirmed the bogus purchases in these assessment years. There also he offered additional income in these assessment years. That provoked the assessing officer to re-open the assessment.
A two-member bench of Shri Chandra Poojari, Accountant Member and Smt Beena Pillai, Judicial Member observed that the Assessing Officer(AO) has made the addition only based on the sworn statement of the managing partner. Without rejecting the books of accounts the AO cannot make any additions towards bogus purchases.
The Tribunal deleted the addition made on the premise of bogus purchase in all these assessments. “As there was no corroborative material to support the addition and the statement has already been retracted, the addition based on no supporting evidence cannot be made.”, the bench concluded.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
