Raj Kumar Goyal Vs PCIT (ITAT Indore)
The appeal before the Income Tax Appellate Tribunal (ITAT), Indore Bench, was filed by the assessee challenging the order dated 10.01.2019 passed by the Principal Commissioner of Income Tax (Pr. CIT) under Section 263 of the Income-tax Act, 1961 for Assessment Year 2014-15.
The assessment had originally been completed under Section 143(3) on 22.12.2016 by determining the total income at ₹15,85,950 as against the returned income of ₹14,35,950. On examination of the assessment records, the Pr. CIT observed that issues for which the case had been selected for scrutiny under CASS had not been examined by the Assessing Officer (AO). A notice under Section 263 dated 06.08.2018 was issued stating that the assessment order appeared to be erroneous and prejudicial to the interests of the Revenue for want of proper enquiries and investigations.
The Pr. CIT identified two issues. First, the assessee had not paid Central Sales Tax (CST) amounting to ₹90,022 up to the due date under Section 139(1), yet neither the assessee had added it back in the computation of income nor had the AO disallowed it under Section 43B. Secondly, during a survey under Section 133A conducted at the premises of M/s Narmada Cotex on 23.02.2016, it was found that the assessee had made cash purchases of loose cotton amounting to ₹14,90,73,159 without supporting documents such as bills, vouchers, transportation receipts or weighment slips. The Pr. CIT observed that the AO had neither examined the genuineness of these purchases nor investigated the issue in the light of Section 40A(3). Accordingly, the assessment order was set aside with directions to the AO to conduct necessary enquiries and verification.
