Case Law Details
DCIT Vs Natural Food Products (ITAT Chennai)
ITAT Chennai held that in the present case AO himself referred the matter for special audit u/s 142(2A), however, report of special auditor was later rejected without assigning any reasons for the same is in explicable.
Facts- The Appellant is engaged in the business of trading of eggs, dhal, oil and sugar. The main product supplied by the appellant during the period was Egg (hen) which was supplied as per the terms of the contract entered with ICDS and Noon Meal Scheme of Govt. of Tamil Nadu.
A search and seizure, u/s. 132 of the Income Tax Act was conducted on 5-7-2018 in the premises of the appellant. During the course of search on 5-7-2018, a statement u/s. 132(4) is said to have been recorded from Mr.T.Gnanasekaran Accounts Manager.
A notice u/s. 153C of the Act was issued. In response to the said notice, the assessee has filed return of income for Asst. Years 2015-16 to 2018-19 and for Asst. year 2010-11 on 03-08- 2021 and declared total income which has been declared in the return of income filed u/s. 139(1) of the Act for all assessment years. The case was selected for scrutiny. Special audit was directed, however, AO rejected the audit report and made additions towards undisclosed income on account of profit earned from bogus bought note purchase and sales and also made addition towards income generated from transaction with dummy entries.
Please become a Premium member. If you are already a Premium member, login here to access the full content.