2021 (3) TMI 656 - AT - Income Tax

Understatement of sales - assessee's only case is that it deserves to be assessed only qua the profit element of the impugned understatement of sales as a consequence to disallowance of handling loss claim of the fuel stock - HELD THAT - We find no merit in assessee's instant grievance in entirety; more so in view of the fact that the CIT(A) has made it clear that the very sum represents gross profit on account of sale of diesel and petrol only. The fact, however, also remains that such a loss to fuel stock and minor variations therein cannot be completely ruled out on account of various miscellaneous factors. We therefore hold that a lumpsum profit addition of ₹ 2,19,551/- on wholesome basis out of the impugned sum would meet the ends of justice with a rider that the same shall not be treated as a precedent in any other assessment year; whatsoever. The Addition u/s 69 - assessee's failure in placing the advances paying customers list in the lower proceedings - HELD THAT - The very factual position continues before the tribunal as well. The fact also remains that such advances in fuel retail business cannot be altogether ruled out as well. We make it clear that the assessee is merely selling its fuel stock on approved rates only hardly living behind any scope of misrepresentation in the books of accounts or stock; per se. We therefore hold that a lumpsum addition of ₹ 2,47,844/- under this last head will meet the ends of justice with a rider that the same shall not be taken as a precedent in any other assessment year.

Summary

Issues Involved:
- Understatement of sales
- Addition of expenses reimbursed by IOCL
- Addition of commission not recorded in books
- TDS on interest payment not deducted
- Addition of advances from customers

Understatement of Sales:
The appeal for the assessment year 2014-15 was based on the CIT(A)-8, Hyderabad's order under section 144 of the Income Tax Act, 1961. The appellant raised various substantive grounds challenging the additions made by the Assessing Officer. The CIT(A) confirmed an addition of ?6,19,551 for understatement of sales. The tribunal considered the appellant's arguments but found no merit in the grievance. It was clarified that the sum represented gross profit on diesel and petrol sales. The tribunal allowed a lump sum profit addition of ?2,19,551, providing relief of ?4 lakhs to the appellant.

Expenses Reimbursed by IOCL:
Apart from the understatement of sales, the Assessing Officer also added expenses reimbursed by IOCL, such as CCTV and stamping charges, to the appellant's income. The tribunal upheld these additions as the expenses were not admitted in the Profit & Loss Account. Similarly, commission received from Axis Bank and interest payments to Kotak Mahindra Prime Ltd. were added to the income as they were not recorded in the books. The tribunal considered these additions valid and declined the appellant's challenge.

TDS on Interest Payment and Advances from Customers:
The tribunal also addressed the issue of TDS not being deducted on interest payments made to Kotak Mahindra Prime Ltd. and the addition of advances from customers. The tribunal found that the appellant failed to provide details and evidence for the advances from customers, leading to their addition to the income. A lump sum addition of ?2,47,844 was allowed under this head, providing relief of ?9 lakhs to the appellant. The tribunal made it clear that this amount should not be treated as a precedent in future assessment years.

In conclusion, the tribunal partly allowed the appellant's appeal, providing relief on certain grounds while upholding additions made by the Assessing Officer and CIT(A) on other issues.