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| The Tax Publishers2019 TaxPub(DT) 7653 (Chen-Trib) INCOME TAX ACT, 1961
Section 143(3) read with section 41(1)
Where on allegation that assessee engaged in business of dairy boosted up its creditors, revenue made addition of entire purchases outstanding for payment more than two weeks, matter was remanded back to AO for consideration afresh because no summons under section 131 or notices under section 133(6) were issued by lower authorities to milk supplies creditors to verify about their genuineness and bona fide.
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Assessment - Additions to income - Alleged inflation of purchases by assessee engaged in business of dairy -
Assessee was engaged in business of milk dairy. During a survey, assessee's partner stated that assessee boosted up creditors and agreed to offer additional income and pay tax. AO made additions for all milk purchases which were outstanding for payment for more than one week. CIT(A) gave part relief by accepting purchases which were outstanding for payment for one more week and entire purchases outstanding for payment more than two weeks stood added to income of assessee. Held: No summons under section 131 or notices under section 133(6) were issued by AO/CIT(A) to milk supplies creditors to verify about their genuineness and bona fide. Assessee had also to rebut said presumption by bringing on record complete details of each of these milk suppliers creditors such as name, address, PAN, reasons for non payments, any dispute with these milk suppliers, communication with these milk suppliers, claims filed by these milk suppliers with any court etc. Considering facts and circumstances of case and in interest of substantial justice to both parties, assessee deserved one more opportunity. Matter was set aside and restored to file of AO for framing fresh assessment de novo on merits in accordance with law.
REFERRED : CIT v. S. Ajit Kumar (2018) 404 ITR 526 (SC) : 2018 TaxPub(DT) 2096 (SC) CIT v. Hotline Electronics Ltd. (2012) 205 Taxman 245(Delhi) : 2012 TaxPub(DT) 1653 (Del-HC) CIT v. S. Khadar Khan Sons 2008 TaxPub(DT) 0790 (Mad-HC) Debi Prasad Malviya v. CIT (1952) 22 ITR 539 (All-HC) : 1952 TaxPub(DT) 0127 (All-HC) Asstt. CIT v. M/s. S.P. Mani and Mohan Dairy [I.T.A. No. 3053/Mds./2016, C.O. No. 175/Mds./2016, dt. 26-7-2017] M/s. S.P. Mani and Mohan Dairy v. Asstt. CIT 2016 TaxPub(DT) 4169 (Chen-Trib) Creamline Dairy Products Ltd. v. Dy. CIT (2012) 27 taxmann.com 237 (Hyd-Trib.) : 2013 TaxPub(DT) 0132 (Hyd-Trib) B.G. Chitale v. Dy. CIT (2008) 115 ITD 97 (Pune-Trib) (SB) : 2008 TaxPub(DT) 2066 (Pune-Trib) Pradeep Kumar Biyani v. ITO (2019) 260 Taxman 298 (SC) : 2018 TaxPub(DT) 7742 (SC) CIT v. S. Khader Khan Son 2012 TaxPub(DT) 3088 (SC)
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