This analysis reviews the appeal by A F Enterprises Ltd against the decision of the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2017-18. The primary focus is on the challenge against the addition of Rs. 46,39,000 made under section 68 of the Income Tax Act.
A F Enterprises Ltd filed a return declaring an income of Rs. 3,50,350. The case was selected for scrutiny, resulting in an addition of Rs. 46,39,000 pertaining to cash sales made to Fashion King Garments Ltd. and Ganesh Enterprises, which was upheld by the CIT(A).
The appellant contested the addition, arguing that the sales were legitimate and that the assessment order was flawed due to a lack of adequate opportunity to provide necessary confirmations from the parties involved. The appeal highlights issues related to the application of TCS provisions and the verification of cash deposits associated with the sales.
The tribunal noted the absence of detailed findings from the AO regarding the purchases related to the sales. There was also a contention that the parties involved might have claimed a set-off of the TCS in their tax returns. The tribunal remanded the matter back to the AO for a detailed examination of these claims.
The appeal by A F Enterprises Ltd brings to light significant procedural and substantive tax issues that impact the scrutiny of business transactions under the Income Tax Act. This case underscores the importance of a thorough examination by tax authorities and the right of the taxpayer to a fair hearing.
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