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Facts
The assessee claimed that the cash deposited was out of sales of goods returned by M/s. Future Lifestyle Fashion Ltd. The Assessing Officer made an addition under section 69A for unexplained money. The assessee produced debit notes related to these returns as additional evidence before the CIT(A).
Held
The CIT(A) confirmed the addition, doubting the genuineness of the debit notes submitted without signatures. The Tribunal noted that these debit notes were filed for the first time before the CIT(A) and were not verified by either the CIT(A) or the AO.
Key Issues
Whether the CIT(A) erred in confirming the addition made by the AO for unexplained money, despite the assessee providing evidence of sales returns?
Sections Cited
69A, 133(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Mumbai “C” Bench, Mumbai.
Before: Shri Pavan Kumar Gadale (JM) & Shri Omkareshwar Chidara (AM)
Per Omkareshwar Chidara (AM) :-
The only ground of appeal raised by the appellant in the above captioned appeal is as follows :-
“In the facts and circumstances of the case and in law, the Ld. National Faceless Appeal Centre, CIT(A) erred in confirming the addition of Rs. 20,70,885/- u/s. 69A as unexplained money.”
During the course of hearing, learned Authorised Representative (Ld. AR for short) of the assessee pleaded that the source of cash deposited is out of sales made by the assessee firm. During this period, the assessee claims that goods worth Rs. 28,52,720/- were returned to them by M/s. Future Lifestyle Fashion Ltd. and the assessee sold these goods in open market and the cash received from customers was deposited into the account. The Ld. AR states that the Learned Assessing Officer (Ld. AO for short) issued notices u/s. 133(6) to only one company – Future Retail Ltd. and gave credit to the “sales returns” from that company. But, no notice was issued to M/s. Future Lifestyle Fashion Ltd, from where assessee claims to have received goods back from sales made to them. The Ld. AR of the assessee claims that, despite producing the required evidences of “Sales Returns” from M/s. Future Lifestyle Fashion Ltd.”, the Ld. AO did not give credit to this amount of goods returned to the extent of Rs. 28,52,720/-.
From the order of the Ld. CIT(A) also, it is observed that the same facts are reproduced, but the operative portion of the Ld. CIT(A) at para 6.1.5, page 11 says that certain additional evidences relating to debit notes without signatures were submitted before him and the genuineness of these debit notes was doubted by the Ld. CIT(A) and the addition of Ld. AO was confirmed.
During the course of hearing, Ld. AR of the assessee has strongly pleaded that these additional evidences filed before the Ld. CIT(A) were all genuine.
The Ld. DR argued that the genuineness of the debit notes produced before the Ld. CIT(A) was not verified by Department, as they were produced before the Ld. CIT(A) for the first time, as mentioned in the Ld. CIT(A) order. Hence, it was pleaded that the addition may be confirmed.
In view of the above, it can be observed that the debit notes were filed for the first time before the Ld. CIT(A) and were not verified either by the Ld. CIT(A) or by Ld. AO.
7. So, it is decided that the matter is remitted back to the file of the Ld. CIT(A) with a direction that he may call for a remand report regarding the genuineness of debit notes and then decide. Suitable opportunity may be given to the assessee to file the objections, if any and pass necessary order in this regard. The matter is remitted to the file of the Ld. CIT(A) as above.
The appeal of assessee is allowed for statistical purposes.
Order pronounced in the open court on 25th July, 2024.