INCOME TAX OFFICER, DELHI vs. ACC LOGISTICS PRIVATE LIMITED, DELHI

This appeal by Revenue is directed against the order of National Faceless Appeal Centre (NFAC), Delhi [for short hereinafter referred to as the "(Ld. NFAC"] dated 27.07.2023 for Assessment Year 2011-12. The word Act hereinafter in this order shall mean the Income Tax Act, 1961.

The Assessee was called absent in the case.

The ld DR informed that the only issue raised in the present appeal through its grounds of appeal are in respect of deletion of addition of Rs. 2,43,08,128/- made by the ld AO. The ld DR submitted that information was received by the revenue regarding deposit of substantial cash as well as credit entries in the bank account of the Assessee maintained with ICICI Bank and Axis Bank aggregating to Rs. 3,06,37,597/-. Notice u/s 148 was issued to the Assessee. The ld DR submitted that the Assessee made lukewarm response to the assessment proceedings and failed to submit any supported documents qua sources of cash and credit entries in its bank account. The ld AO noted that the Assessee had withdrawn cash from an entity M/s. Anil Cargo Pvt. Ltd and subsequently deposited the same in its bank account and then again transferred the same to the account of M/s. Anil Cargo Pvt. Ltd using banking channels. In particular the ld DR drew reference to para 3 to 11 of the assessment order. It was argued that while his addition the ld AO has given due credits wherever required to the Assessee and that against total amount of Rs. 4,53,07,878/-, the ld AO made addition of only Rs. 2,43,08,128/-. It is the case of the revenue the ld CIT(A) has not given any finding in its order on the merits before deleting the impugned addition. Reference was invited to following remarks of the ld CIT(A) in the concluding part of his order “……The AO made the addition on the ground that the transactions with Anil Cargo were devoid of any economical or rational purpose. Finally, the AO added the difference between total credits minus total turnover. The AO has not given any reason for doing so. Their AO has also not brought any specific transaction to show that the transaction recorded by assessee were not genuine. As against this the assessee explained that there was reduction in debtors. Therefore, the total credits were more than the turnover. In my opinion, the addition made by AO was not based on any material facts and was based on some hypothesis. The AO treated the difference between total credits and turnover as the income of assessee without any logic. If the AO treated the credits from Anil Cargo as not genuine then the AO should have added the credits appearing in the name of Anil Cargo. However, this was not done. Considering the overall facts, the AO is directed to delete addition of Rs. 2,43,08,128/-. These grounds of appeal are allowed.”

We have considered the argument put forth by the revenue in the light of material on record. We have noted from the order of the ld AO that the response of the Assessee to the notices of the ld AO was not adequate. We have also noted that the ld CIT(A) has not given any detailed finding on the merits of the addition accept for drawing summary and sketchy presumptions. Ld CIT(A) is an authority having powers co-terminus with that of an AO and in case he had any doubts about AOs enquiries he had all the right to initiate necessary action. We have noted that there is no elaborate finding as to how the addition made by the ld AO was unwarranted. Accordingly, in the interest of justice we deem it appropriate to remit the file back to ld CIT(A) for fresh adjudication of the matter. We, therefore, set aside the ld CIT(A) and direct him to re-adjudicate the appeal afresh by giving opportunity of being heard to the Assessee and in accordance with law. All the grounds of appeal raised by the revenue are therefore allowed for statistical purposes.

In the result, the appeal of the revenue is allowed for statistical purposes.