Ducati India Private Limited Vs ACIT (ITAT Delhi)
ITAT Delhi held that addition made under section 68 of the Income Tax Act is lower as alleged in show cause notice as compared to addition made by ACIT hence matter remanded for fresh consideration.
Facts- The assessee is in the wholesale distribution of sale of premium motorcycles manufactured by Ducati, Thailand to the dealers in India and in distribution of spare parts, accessories, clothing and merchandise imported from its Ducati group entities to the dealers in India.
During the course of assessment proceeding, the assessee was asked to submit the details of the creditors. The assessee was thereafter directed to file the confirmation of accounts from all the creditors and to explain the discrepancy arising in the balance outstanding against the creditors. As no response was made by the assessee, addition was made to the tune of 2,63,85,935/-treating the same as unexplained credits in the books of the assessee u/s 68 of the Act which was further confirmed by the First Appellate Authority. Hence the instant appeal.
Assessee contested that the show cause was only on the difference of amount of Rs. 1,89,47,593/- in the credit balance of M/s. Ducati Motor(Thailand) Company Limited and the accounts of assessee whereas the impugned addition has been made to the tune of Rs. 2,63,85,935/-. No show cause, therefore, was issued before making addition of the impugned amount by the ACIT and therefore the assessment proceedings is not sustainable in the eyes of law.
