A F ENTERPRISES LTD,NEW DELHI vs. ACIT, CIRCLE-1(1), NEW DELHI
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Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI
Before: SHRI KUL BHARAT
PER KUL BHARAT, JM:
This appeal, by the assessee, is directed against the order of the learned
Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC),
Delhi, pertaining to the assessment year 2017-18. The assessee has raised
following ground of appeal:
2 ITA No. 2797/Del/2022 “That on the facts and circumstances of the case, the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [‘CIT(A)’] erred on facts and in law in the impugned order dated 28.09.2022 passed in Appeal No. CIT(A), Delhi-1/10391/2019-20 confirming the addition of Rs. 46,39,000 made by Assistant Commissioner of Income-tax, Circle-1(1), New Delhi [‘AO’] under section 68 of the Income tax Act, 1961 [the ‘Act’] in the assessment order dated 08.12.2019 passed for Assessment year [‘A.Y.’] 2017-18 under section 143(3) of the Act.”
The only effective ground in this appeal is against confirming the addition of
Rs. 46,39,000/- . Facts giving rise to the present appeal are that in this case return
was filed electronically declaring income of Rs. 3,50,350/-. The case was selected
for scrutiny assessment and the assessment u/s 143(3) of the Income tax Act, 1961
[the ‘Act’] was framed. Thereby the AO made addition of Rs. 46,39,000/- in
respect of cash sales made to Fashion King Garments Ltd. and Ganesh Enterprises.
Aggrieved against this the assessee preferred appeal before learned CIT(Appeals),
who after considering the submissions sustained the addition. Aggrieved against
this the assessee is in appeal before this Tribunal.
Learned counsel for the assessee vehemently argued that the authorities
below were not justified in sustaining the additions. He further reiterated the
submissions as made in the written synopsis. He submitted that the assessee was
not given effective opportunity to explain and provide the necessary confirmation
from the parties. He submitted that the parties have confirmed their account. TCS
provisions are applicable in respect of sales made by the assessee. He submitted
3 ITA No. 2797/Del/2022 that the assessee is ready to provide confirmation from the parties above
mentioned.
Learned DR opposed the submissions and supported the orders of authorities
below.
I have heard rival contentions and perused the material available on record.
The issue in the present appeal in dispute related to the additions of Rs. 21,39,000/-
and Rs. 25,00,000/- in respect of Fashion King Garments Ltd. and Ganesh
Enterprises. The AO has noted the cash deposited by the assessee. However, the
AO has not given any finding regarding the purchases in the assessment order the
AO noted that on inquiry it was found that these firms are closed. The explanation
of the assessee is that it had made cash sales to these two parties. Considering the
totality of the facts I am of the considered view that the AO should have given
finding in respect of purchases made by the assessee for the items which were
claimed to have been sold to these entities. Further, it is contention of the assessee
that those parties might have claimed set off of the TCS in their respective returns
of income. Hence, the impugned order is set aside. The assessment is restored to
the file of AO to verify the correctness of the claim of the assessee that it had made
sales in cash to these parties and what is the status of their assessment by the AO.
Ground raised is this appeal is allowed for statistical purposes.
4 ITA No. 2797/Del/2022 6. Appeal of the assessee is allowed for statistical purposes.
Order pronounced in open court on 31st July, 2023.
Sd/- (KUL BHARAT) JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI
