Case Law Details
DSG Papers Pvt. Ltd. Vs The ACIT / DCIT (ITAT Chandigarh)
ITAT Chandigarh held that denial of cross-examination, based on which addition on account of unrecorded sales was confirmed, demolishes the very foundation of making addition and hence such addition is unsustainable in law.
Facts-
Post search operations, AO proceeded to reopen the assessee’s case u/s 148. During the course of re-assessment proceedings, the AO proceeded to reject the books of account maintained by the assessee u/s 145(3) of the Act and, thereafter, proceeded to complete the re-assessment at an income of Rs. 46,36,749/- after making an addition of Rs. 31,40,021/- on account of additional net profit by applying the net profit rate of 4.42%. The alleged undisclosed sales for the year were computed at Rs. 3,62,60,331/-.
Aggrieved, the assessee carried the matter before Ld. First Appellate Authority challenging the rejection of books of account and also challenging the addition on merits. The Ld. CIT(A) partly allowed the appeal of the assessee.
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