INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Opportunity of assessee -

AO noticed that an amount of Rs. 22 lakhs was paid by M/s. V.C. Solutions as consultancy charge to assessee for the year under consideration, but, no income was shown by assessee on this amount and no satisfactory explanation was given by the assessee. Therefore, AO made addition of Rs. 22 lakhs to total income of assessee. During appellate proceedings, assessee filed a certificate from M/s. V.C. Solutions (P) Ltd. before CIT(A), wherein it had been certified that there was debit balance of Rs. 34,94,435 as on 31-3-2010 whereas in the ledger account provided by assessee balance of M/s. V.C. Solutions (P) Ltd. had been shown at Rs. 29,72,500. Accordingly, CIT(A) trearted that difference was due to the grossing up of amount of TDS by M/s. V.C. Solutions and assessee had shown the net amount excluding TDS and there was wrong credit in the name of Ms. Chandni amounting to Rs. 2,94,435. Held: Although CIT(A) had called for a remand report from AO, however neither issue was properly explained by assessee during remand proceedings to AO nor CIT(A) considered the same properly in the light of arguments advanced by assessee. Considering totality of the facts of case and in the interest of justice, issue was restored to AO with direction to grant opportunity to assessee to substantiate its case and then decide the issue as per facts and law.

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2010-11

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