Prasanta Kumar Mohapatra Vs PCIT (ITAT Cuttack)
ITAT Cuttack held that difference between the sales declared in the profit and loss account and as per the cash book entire added by PCIT without providing sufficient opportunity to reconcile the same. Thus, AO directed to examine the issue.
Facts- The assessee is an individual and is proprietor of four firms which are engaged in different kind of businesses such as Honda two-wheeler dealership, Fuel Filling station of Reliance, Iron ore crusher and retail sale of IMFL. The return of income for the impugned year was filed on 7.11.2017 declaring total income at Rs.97,74,720/-.
The case was taken up for complete scrutiny and after verification of the records, the assessment was completed vide order passed u/s. 143(3) dated 26.12.2019 wherein an addition / disallowance of Rs.3 lakh was made to the returned income. Thereafter the ld. PCIT Sambalpur had initiated the proceedings u/s 263 and passed the impugned order wherein ld. PCIT has modified the assessment order and added a sum of Rs. 3,44,64,222/- u/s. 68 towards unexplained cash credits against which the assessee is in appeal before us.
Conclusion- Held that we are of the considered view that the assessment order is erroneous and prejudicial to the interest of revenue. However, the action of the ld. PCIT in modifying the assessment order and making the addition of the difference amount of Rs. 3,44,64,222/- is seems to be very harsh on the assessee who was not provided sufficient opportunity to reconcile the same with plausible documentary evidences. Thus, in the interest of justice one more opportunity should be allowed to the assessee to explain and reconcile the difference of Rs.3,44,64,222/-. Therefore, though we are in agreement with the conclusion drawn by the ld. PCIT that the assessment order is erroneous as well as prejudicial in the interest of revenue however, it would not be fair to the assessee if one more opportunity is not provided to the assessee. Accordingly, we modified the directions given in the order of ld. PCIT and instead of directing to make the addition of amount Rs.3,44,64,222/- to the income of the assessee, we direct the AO to examine the issue of difference between the sales declared in the profit and loss account and as per the cash book and decide the same accordingly as per the law.
