Ador Welding Limited Vs DCIT (ITAT Mumbai)
ITAT Mumbai Remands 69A ‘Unaccounted Sales’ Addition; AO Changed Allegation Without Fresh SCN & CIT(A) Failed to Examine Evidence
Assessee appealed against the sustenance of an addition of ₹2,79,87,351 made as unexplained money u/s 69A, based on alleged unaccounted sales to four parties-Heavy Vehicles Factory, Commanding Officer (Air Force Station), Sri Satya Agencies, & Shreenath Agencies.
ITAT noted that AO issued an SCN alleging bogus expenses to these parties, but in the final order completely shifted the allegation, treating the same entities as customers & taxing corresponding amounts as unrecorded sales-without issuing any fresh show-cause notice. Assessee was given less than 3 days to respond to the original SCN, contrary to natural justice guidelines requiring at least 7 days.
Before CIT(A), Assessee produced invoices, e-way bills, GST data, reconciliations, & confirmations from two dealers, demonstrating that the transactions were actual recorded sales, duly reflected in the books & GST returns. However, CIT(A) ignored this documentary evidence, failed to obtain a remand report, & merely reproduced AO’s findings without independent analysis.
Tribunal held that because substantial additional evidence was filed & not properly examined, & since the AO had changed the very basis of addition without a fresh SCN, the matter required full verification. It therefore set aside CIT(A)’s order & remanded the case to AO for fresh examination of all invoices, e-way bills, confirmations, ledgers, & reconciliations; the AO is free to call for further supporting documents & must allow relief if sales are indeed recorded.
