Anupama Jewellery Vs ITO (ITAT Cochin)
Kochi: The Income Tax Appellate Tribunal (ITAT), Cochin bench, has set aside an order from the National Faceless Appeal Centre (NFAC), effectively sending back a case involving an income addition made on sales during the demonetisation period for fresh examination by the Commissioner of Income Tax (Appeals) [CIT(A)]. The tribunal’s decision hinged on the principle of natural justice, noting that the CIT(A) had confirmed the addition without addressing the taxpayer’s grounds of appeal and dismissed the case without hearing the assessee.
The case involves Anupama Jewellery, a partnership firm engaged in the jewellery business. For the assessment year 2017-18, the firm had filed its return of income declaring a total income of Rs. 97,310 on November 24, 2017.
Subsequently, the Income Tax Officer (ITO), Ward-1(1), Kochi, completed the assessment under Section 143(3) of the Income Tax Act, 1961. In the assessment order dated December 21, 2019, the Assessing Officer (AO) made a significant addition to the firm’s income. This addition amounted to 50% of the sales recorded during the demonetisation period, totalling Rs. 46,00,000. The AO justified this addition by characterising these sales as “abnormal.” As a result of this adjustment, the total assessed income was raised to Rs. 23,97,310.
