2015 (8) TMI 1511 - AT - Income Tax

Disallowance of expenses @ 20 % and G.P rate - Estimation of income - Difference in VAT account and cash discount - HELD THAT - On certain issues relief to some extent could have been granted to the assessee namely reduction of disallowance of expenses @ 20 % and G.P rate could have warranted an interference on facts. It is also seen that the assessee has also not helped its case by placing the relevant facts and submissions on record. Since on a reading of the issues under challenge and how they have been canvassed before the CIT(A and considering the same have been more or less upheld even where a partial relief on facts on record could have been granted it leads to the conclusion that the order passed has been passed with the mindset that the claims necessarily had to be rejected. The fact that the representation on the part of the assessee was also not complete and proper has already been taken note of as the evidences upon which reliance could have been placed and were evidences which the assessee ought to have in its possession has never been brought on record is also coming out from the orders. In view of these peculiar facts and circumstances considering the overall factual background in the interests of substantial justice the impugned order is set aside. The issue is restored back to the file of the CIT(A granting liberty to the assessee to file fresh evidences if any in support of its claim. CIT(A) thereafter shall pass a speaking order in accordance with law. Needless to say that it is hoped that the opportunity so provided is not abused by the assessee and a proper compliance is made before the CIT(A). Appeal of the assessee is allowed for statistical purposes.

Summary

Issues Involved:
Assessment of income, scrutiny of accounts, additions made by AO, non-production of complete books of accounts, diversion of income, disallowance of expenses, tinkering with G.P. rate, interest-free advances, difference in accounts, appellate review of CIT(A) order.

Analysis:
The appellant challenged the correctness of the CIT(A) order for the 2009-10 assessment year. The appellant failed to appear during the hearing, leading to an ex-parte decision in favor of proceeding with the appeal. The assessment revealed discrepancies in the accounts, resulting in various additions to the declared income. These additions included discrepancies in closing stock, disallowed expenses, changes in G.P. rate, interest-free advances, and differences in accounts.

The CIT(A) upheld the additions, noting the lack of documentary evidence supporting the appellant's claims. The appellant's arguments regarding commission agents and expense reimbursements were dismissed as general without specific evidence. The CIT(A) acknowledged that some relief could have been granted if proper evidence had been presented. The order was set aside due to the lack of complete representation by the appellant and the need for fresh evidence to be submitted.

The appellate tribunal allowed the appeal for statistical purposes, emphasizing the importance of proper compliance and the submission of relevant evidence. The case was remanded back to the CIT(A) for a new decision based on any additional evidence provided by the appellant. The tribunal hoped that the appellant would utilize the opportunity for a fair resolution.