E2e Supply Chain Solutions Ltd Vs DCIT (Madras High Court)
Conclusion: Reassessment order was set aside and remitted back to Respondent due to insufficient details in the assessment order on employee’s cash transactions.
Held: AO contended that on verification of the bank statements, it was observed that credits in the bank account of one of employee were by cash to the tune of Rs.30,32,416/- made by assessee company in account No.067501501730 in M/s ICICI Bank, Vadodara Branch used to transfer money as well as deposited cash for disbursement of the same to lorry drivers and also for other expenses, which clearly attracted the provisions of section 40A(3), in the hands of M/s E2E Supply Chain Solutions Limited, for the F.Y. 2013-14 relevant to the AY.2014-15. The same had to be added back to the total income of assessee company under the provisions of Section 40A(3) of the Income Tax Act. It was held that although the re-opening of assessment based on the information’s gathered from the Investigating Wing of the Income Tax Department, it would arm the Department to re-open the Assessment, the ultimate Assessment Order that was passed ought to have give the particulars of the cash transactions of the account of such employee. This had not been mentioned in the impugned order. Therefore, the impugned order was set aside and the case was remitted back to the respondents to pass a fresh order giving the particulars of the date of cash transactions made into the account of the said employee. Therefore, the impugned orders were set aside and to pass a fresh order on merits. Department should furnish the date of transfers mentioned in the reasons given for re-opening the respective Assessment and any other information’s based on which, such cash deposits into the account of the said employee was linked to assessee. Since the dispute pertained to the Assessment years 2014-15 and 2015-16, it was expected that the denovo proceedings would be completed as expeditiously as possible preferably within a period of six months from the date of receipt of a copy of this order.
