Section 68 cannot be applied in relation to the sales receipt

Shree Sanand Textiles Industries Ltd. Vs DCIT (ITAT Ahmedabad)

1. The Assessee is a public limited company and engaged in the business of manufacturing of textile products. Income tax return showing loss of Rs. 26,92,682/- was filed for Assessment Year (‘AY’) 1995-96.

2. Regular assessment u/s 143(3) of the Income-tax Act was completed on 26/02/1998 at an income of Rs. 27,74,100/- (Addition of unexplained cash credit and interest-free loan and advances).

3. A search was conducted by the Central Excise Department on 18/05/1998 wherein it was found that the assessee was showing an inter-unit transfer of finished goods whereas it was selling the same in the domestic market to avoid the excise duty. On the basis of the same case of the assessee was reopened u/s 147 of Income-tax Act.

4. The assessee during the assessment proceedings was requested to produce the books of accounts but it expresses its inability to do so as the books of account were seized by the Excise Department.

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