₹1.38 Cr Income Tax Addition on Unaccounted Profit from Business Transaction: ITAT Directs Fresh Adjudication by CIT(A) [Read Order]

The Income Tax Appellate Tribunal (ITAT), New Delhi Bench, has restored a matter relating to an addition of ₹1,38,66,386 made on account of alleged unaccounted profits from business transactions, back to the file of the Commissioner of Income Tax (Appeals) ( CIT(A) ) for fresh adjudication.

The appellant, Forum Sales Pvt Ltd, filed its return of income declaring total income ₹75,88,078 under section 153A of the Income Tax Act, 1961 on 24.07.2015. The assessment was completed under section 143(3) of the Act declaring total income as ₹7,43,36,920.

The matters pertained to the financials of the assessee from the assessment years 2013-14 and 2014-15.

The Assessing Officer (AO) made addition on account of unaccounted profits arising with transactions of M/s Bajrang trader and Gurunanak Enterprises. The appellant appealed before the CIT(A) who confirmed the addition. The appellant then filed an appeal before ITAT which restored the matter to AO with directions to verify the transactions carried out during the relevant two years.

Following the direction of ITAT, AO passed an order under section 254 read with section 153A read with section 143(3) confirming the addition amounting to ₹1,38,66,386. During the second round of appeals, the CIT(A) observed that the appellant did not provide any corroborative evidence in support of his grounds of appeal and accordingly dismissed the appeal leading to this appeal before the ITAT.

None appeared on behalf of the appellant, therefore the tribunal proceeded to hear the revenue department and decided on the matter based on available material on the record .

The counsel for the respondent, Jitender Singh, did not raise any objection for sending the issue back to CIT(A) with direction to adjudicate the issue by passing a speaking order after giving the opportunity of being heard.

Mahavir Singh, Vice president and Renu Jauhri, Accountant member observed that the CIT(A) had dismissed the appeal without deciding the issues on merits and had passed a non-speaking order, which is not sustainable in law.

In the light of facts and circumstances, the tribunal restored the matter for both assessment years, back to CIT(A) for fresh adjudication.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates