Wednesday, August 10, 2016

No sec. 69C additions on basis of info received from sales tax dept. without giving hearing change to assessee

Facts:

a) The assessee filed return of income declaring certain taxable income.

b) Information received from Sales Tax Department revealed that the assessee was involved in taking accommodation entry of bogus purchases. On the basis of this information, the assessment was reopened by the AO. He made certain additions to income of the assessee under section 69C.

c) On appeal, the CIT(A) partly allowed the appeal of the assessee and restricted the disallowance to 25 per cent of the purchases.


On appeal, the Tribunal held as under:

1) It was found from the orders of the authorities below that the AO had made the addition under section 69C on the basis of the report provided by the State Sales Department and the statements of the parties, as recorded by the Sales Tax Department.

2) Though the assessee has provided documentary evidences, these documents have not been considered by the authorities below and they made the addition only on the basis of statement of a third person, without giving any opportunity to the assessee. Therefore, the assessee should be given an opportunity to substantiate its case before the Assessing Officre-ITO V. RAJKUMAR B. MUTREJA [2016] 72 taxmann.com 76 (Mumbai - Trib.)
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