2021 (3) TMI 1109 - AT - Income Tax

Undisclosed income - Discrepancies between the income reported by the assessee and as noticed by the AO in Form No.26-AS - HELD THAT - CIT (A) has reproduced the submissions of the assessee as held that the assessee has not submitted any further information besides what has been submitted before the AO and that the appeal with regard to the claim of conversion charges were not submitted and no fresh evidence or information was submitted by the assessee inspite of several opportunities. All the details have been given by the assessee. The invoices and also the ledger a/c of the parties are submitted before us and the certificate is also given that these documents have been filed before the AO and the CIT (A) except for the information from M/s. Alembic Pharmaceuticals Ltd and M/s. Ajanta Pharma Ltd before the CIT (A). We find that the CIT (A) has failed to consider the same nor has she called for a remand report from the AO for the evidence filed by the assessee. In view of the same, we deem it fit and proper to remand the Grounds 2 to 6 to the file of the AO for verification and reconsideration in accordance with law. Therefore, Grounds 2 to 6 are allowed for statistical purposes. Assessee had submitted detailed submissions before the CIT (A) but without verifying the same, the CIT (A) has confirmed the order of the AO. The assessee has pleaded that the income from trading unit alone may be disallowed u/s 80IC but the CIT (A) has confirmed the assessment order on the ground that the assessee has not submitted any proof that the expenses are not excessive and also held that the assessee is in trading business and not manufacturing business. We find that in the paper book filed before the Tribunal in pages 49 to 55 are the account details of the H.O Traders. CIT (A) has not considered this evidence also nor called for a remand report also. Therefore, we deem it fit and proper to remand this issue also to the file of the AO for denovo consideration in accordance with law. Assessee s appeal is treated as allowed for statistical purposes.

Summary

Issues:
1. Discrepancy in reported receipts between the assessee's return of income and Form 26AS.
2. Treatment of employee contributions to Provident Fund & ESI paid beyond due dates.
3. Disallowance of claimed expenses under "other manufacturing expenses" and "administrative expenses."
4. Denial of deduction u/s 80IC on income from trading unit and other sources.
5. Appeal against the order of the CIT (A) on various grounds.

Analysis:
1. The Assessing Officer (AO) noted a difference in reported receipts by the assessee and Form 26AS, treating the variance as unreported turnover. The assessee provided a reconciliation statement, but the AO was not convinced and treated the difference as income. The Tribunal remanded this issue to the AO for verification and reconsideration due to lack of consideration of evidence by the CIT (A).

2. The AO brought to tax employee contributions towards Provident Fund & ESI paid after due dates under section 36(1)(va) of the Income Tax Act. The Tribunal did not address this issue specifically in the judgment.

3. The AO disallowed claimed expenses under "other manufacturing expenses" and "administrative expenses," considering them as not allowable or capital expenditures. The Tribunal did not address this issue specifically in the judgment.

4. The AO denied deduction u/s 80IC on income from the trading unit and other sources, leading to an appeal before the CIT (A) and subsequently the Tribunal. The Tribunal remanded this issue to the AO for denovo consideration due to lack of proper verification and consideration of evidence by the CIT (A).

5. The appeal raised various grounds challenging the CIT (A)'s order, including discrepancies in reported income, treatment of unreported turnover, denial of deductions, and disallowances. The Tribunal allowed the appeal for statistical purposes, remanding specific issues back to the AO for proper verification and reconsideration in accordance with the law.

Overall, the Tribunal's judgment addressed the discrepancies in reported income, treatment of expenses and deductions, and remanded several issues back to the AO for further examination and consideration based on the evidence provided by the assessee.