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2016 (2) TMI 1269 - AT - Income TaxSuppression of sales of cloth - application of the assessee filed for admission of additional evidence under Rule 46A of the I.T. Rules - HELD THAT - It is apparent from the records that in spite of the repeated opportunities provided by the Assessing officer, the assessee failed to furnish the requisite evidence in support of its claim. It is also observed by the CIT(A) that the assessee took the plea that instead of sales figure of 15722.590 kgs was taken by the Assessing officer for computing closing stock, the actual sales were to the tune of 20273.73 kg. It is relevant to observe here that the assessee himself admitted in its letter dated 30.4.2007 that the total sales of cloth during the year under consideration was 15722.590 kg. Thus, the assessee has taken entirely a new stand in this case stating that actual sales figure is 20223.73 kg instead of 15722.590 kg. In such circumstances, the CIT(A) was fully justified in rejecting the application of the assessee filed for admission of additional evidence under Rule 46A of the I.T. Rules. As regards, merits of the case, we are also in agreement with the observations of the CIT(A) that admittedly the assessee vide its letter dated 30.4.2007 claimed that total sales of cloth during the year was at 15722.590 kgs. The assessee had purchased 27277 kgs of yarn out of which it produced 23886.86 kgs of cloth and sold cloth of 15722.590 kgs and declared 8435.823 kgs of cloth as its closing stock as on 31.3.2005. It is observed that before the CIT(A) the assessee had taken altogether a new plea that actual sales figures is 20223.73 kgs which appears to be an afterthought. In view of the assessee s letter dated 30.4.2007 addressed to the Assessing officer, we are of the view that the CIT(A) was fully justified in rejecting the ground raised by the assessee on merits. Accordingly, we uphold the order of CIT(A) in confirming the addition of ₹ 7,70,013/- made on account of suppression of sales of cloth. Consequently, we reject ground Nos. 1 and 2 of the appeal. Addition for want of proof from the assessee - amount as being payable to its ex-partners - HELD THAT - Assessee has contended that the Assessing officer disallowed the amount on account of cessation of trading liabilities ignoring the fact produced during the assessment proceedings that assessee itself has written off the balance amount of ₹ 1,44,966/- payable to M/s Nice Grip Tools Exports in the assessment year 2006-07 and the assessment for which was finalized vide order dated 23.12.2008 without making any adverse inference in this regard. Taking into consideration the above contention of the assessee, we think it appropriate to set aside the findings of the CIT(A) on this issue and remand the matter to the Assessing officer with a direction to consider the above submissions of the assessee and decide the issue afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee. Ground of appeal is allowed for statistical purposes. Unabsorbed brought forward depreciation - HELD THAT - It is relevant to observe there that the orders of the lower authorities on this issue are cryptic and non-speaking. It is not clear as to whether assessment to the assessment year 2004-05 was framed u/s 143(3) of the Act or the return for that year was processed u/s 143(1) of the Income-tax Act, 1961. In our opinion, the issue needs to be decided at the level of the Assessing officer. Accordingly, we set aside the findings of the CIT(A) on this issue and remand the matter to the file of the Assessing officer with a direction to decide the issue afresh in accordance with law after affording due and reasonable opportunity of being heard to the assessee.
Issues Involved:
1. Condonation of delay in filing the appeal. 2. Addition of Rs. 7,70,013 on account of alleged suppression of sales of cloth. 3. Addition of Rs. 77,658 being the amount payable to ex-partners of the firm. 4. Addition of Rs. 1,50,600 on account of remission of liabilities shown in the balance sheet. 5. Disallowance of adjustment of carry forward unabsorbed depreciation of Rs. 3,46,659. Issue-wise Detailed Analysis: 1. Condonation of Delay in Filing the Appeal: The assessee filed the appeal with a delay of 23 days. The delay was attributed to the office clerk of the counsel inadvertently placing the appeal documents in the High Court file. The Tribunal observed that there was no material on record to controvert the assessee's contention and emphasized that the jurisdiction to condone delay should be exercised liberally. The Tribunal found the explanation satisfactory and condoned the delay. 2. Addition of Rs. 7,70,013 on Account of Alleged Suppression of Sales of Cloth: The Assessing Officer (AO) noted discrepancies in the closing stock of cloth, leading to an addition of Rs. 7,70,013. The assessee requested admission of additional evidence under Rule 46A of the I.T. Rules, 1962, claiming the figures provided earlier were incorrect. However, the CIT(A) refused to admit the additional evidence, stating none of the conditions under Rule 46A were satisfied. The Tribunal upheld the CIT(A)'s decision, noting that the assessee failed to provide any plausible explanation for not producing the sales bills earlier. The Tribunal agreed with the CIT(A) that the assessee's new plea appeared to be an afterthought and confirmed the addition. 3. Addition of Rs. 77,658 Being the Amount Payable to Ex-partners of the Firm: The AO added Rs. 77,658 for want of proof regarding amounts payable to ex-partners. The assessee argued that these balances were old and had been accepted in previous assessments. The Tribunal found that the CIT(A) had not considered the assessee's submissions and remanded the matter to the AO for fresh consideration, directing the AO to decide the issue afresh after providing a reasonable opportunity of being heard to the assessee. 4. Addition of Rs. 1,50,600 on Account of Remission of Liabilities Shown in the Balance Sheet: The AO added Rs. 1,50,600, noting that the assessee failed to substantiate certain liabilities. The assessee contended that part of the liability had been transferred to a sister concern and the remaining amount was written off in the subsequent year. The Tribunal observed that the CIT(A) did not consider the assessee's submissions and remanded the matter to the AO for fresh consideration, directing the AO to decide the issue afresh after providing a reasonable opportunity of being heard to the assessee. 5. Disallowance of Adjustment of Carry Forward Unabsorbed Depreciation of Rs. 3,46,659: The AO disallowed the claim of unabsorbed depreciation, noting there was no such claim determined as allowable to be carried forward in the previous assessment year. The CIT(A) upheld the AO's decision. The Tribunal found the orders of the lower authorities to be cryptic and non-speaking, and remanded the matter to the AO for fresh consideration, directing the AO to decide the issue afresh after providing a reasonable opportunity of being heard to the assessee. Conclusion: The appeal was partly allowed for statistical purposes, with several issues remanded to the AO for fresh consideration. The Tribunal emphasized the need for providing the assessee with a reasonable opportunity to present evidence and explanations.
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