2015 (3) TMI 98 - HC - Income Tax

Suppression of sales - aggregate of sales in the annexure produced before the AO did not tally, both in the number of purchasers and the amounts paid as per AO - ITAT deleted addition - Held that - CIT (A) as well as the Tribunal have concurrently found that there was a clerical mistake in accounting and recording of sale to BARC in the subject assessment year even though it pertains to the following Assessment Year. This mistake was not only evident from the date of the invoices produced before the authorities but also from the fact that the aforesaid sale was taken into account in the Respondent Assessee's sales for the following Assessment Year. The aforesaid finding being pure finding of fact does not raise any substantial question of law. Therefore, no interference of this Court, is warranted. - Decided in favour of assessee. Unaccounted advances - Tribunal remanding back the issue of verification of the advances to the file of the CIT(A) when it had noted that the CIT(A) had passed a perverse order by allowing a claim where the assessee was not in a position to produce evidence - Held that - The impugned order after recording a finding that the conclusion was arrived at by the CIT(A) was without proper consideration, restored the issue to him for fresh consideration. We do not see any prejudice being caused to the Respondent Assessee if the matter has been restored to the CIT(A) for fresh consideration. No substantial Questions of law. - Decided against revenue

Summary

Issues:
1. Sales suppression discrepancy in assessment.
2. Verification of advances and remand to CIT(A).
3. Upholding orders of AO on advances confirmation.

Sales Suppression Discrepancy:
The case involved a discrepancy where sales reported were higher than actual sales due to a clerical error. The Assessing Officer added the entire difference as suppressed sales, but the CIT(A) overturned this decision, attributing the difference to a human mistake. The Tribunal upheld the CIT(A)'s decision, noting that the mistake was evident from the invoices and that the sale was accounted for in the following assessment year. The High Court concurred with the lower authorities' findings, stating that it was a factual error and did not raise any substantial legal question. Therefore, Question (a) was dismissed.

Verification of Advances and Remand to CIT(A):
Regarding the advances received from third parties, the Assessing Officer added them to the income as the assessee failed to provide evidence. The CIT(A) deleted the addition without seeking a remand report. The Tribunal disagreed with the CIT(A)'s decision and remanded the issue back to the CIT(A) for fresh consideration. The assessee argued against this decision, claiming that the matter should have been referred back to the Assessing Officer. The High Court held that the remand to the CIT(A) was justified for proper consideration and that no prejudice was caused to the assessee. The Court also noted that it was not mandatory to refer every matter back to the Assessing Officer. Ultimately, Questions (b) and (c) were deemed not to raise any substantial legal questions.

Conclusion:
The High Court dismissed the appeal, upholding the decisions of the lower authorities. The Court found no grounds to interfere with the findings related to the sales suppression discrepancy and the verification of advances issue. The appeal was dismissed with no order as to costs.