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2019 (1) TMI 1139 - HC - Income TaxAssessment of sundry creditors'/trade creditors' balances as deemed income - Scope of Section 41(1) on the mis-construction of Explanation (1) below the said Section - Held that:- It is important to note that during the pendency of the proceedings before the Tribunal, the assessment for the year 2010-11 was taken up by the AO and the very same issue was taken up for consideration. The assessee produced the names of those creditors and an enquiry was conducted. The officers of the Department were directed to investigate into the matter after bringing on record the list of all the sundry creditors, the statements given and the no due certificates produced. Yet, the Assessing Officer made a protective assessment vide order dated 27.3.2013. This order is now the subject matter of appeal before the CIT(A). The mistake committed by the assessee is not placing the order dated 27.3.2013 before the Tribunal when the appeal was heard for the assessment year 2009-10. Had it been done, the Tribunal might have remanded the matter for a fresh consideration to the CIT(A), since, by then, the appeal as against the assessment order dated 27.3.2013 for the assessment year 2010-11 was pending. While passing the order dated 09.11.2012 the CIT(A) did not decide the legal issue as to whether the statement given during the survey was admissible and as to whether was the Assessing Officer justified in making the addition based on the statement, but proceeded to rely upon the statement to dismiss the appeal. Tribunal also proceeded in a different direction than what was argued before it. Thus, in our considered view, the matter requires re-consideration, for which purpose, we propose to remand the matter to the CIT(A) to be heard along with the appeal filed challenging the assessment order dated 27.3.2013 for the assessment year 2010-11. - Decided in favour of assessee.
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