2021 (9) TMI 1087 - AT - Income Tax

Undisclosed sales - Difference in total sales shown in the VAT return filed and the total sales as per the trading account of the assessee - HELD THAT - The assessee even before the Tribunal could not reconcile the difference as per the sales disclosed in the VAT return and as per the trading account maintained by the assessee. Since the assessee has not been able to dispel the finding of the A.O. and the CIT(A), the addition is upheld. Decided against assessee. Addition of toll charges by the IOC - Since the same was not offered to tax, the amount was added to the total income of the assessee - HELD THAT - There is no dispute that the impugned amount received from IOC is not declared in the turnover of the assessee. The above amount whether it constitute income has not been disputed by the assessee before the Tribunal. Hence, the addition is confirmed. Enhancement of purchases by CIT-A - total purchases during the financial year 2014-2015 as per the IOC statement was more than trading account of the assessee showing purchases - HELD THAT - As per the IOC statement, the total purchases made by the assessee was at ₹ 9,28,86,503. As per the assessee's trading account, the purchases from IOC is only a sum of ₹ 9,28,81,970. Therefore, the difference of ₹ 4,526 is sustained. As regards the enhancement, the CIT(A) relied on the purchases declared under the VAT return instead of statement of IOC. I noticed that there is no enhancement notice given by the CIT(A). Further the IOC had clearly stated that the assessee had made purchases only to the extent of ₹ 9,28,86,503. Therefore, the statement of IOC is to be taken as sacrosanct. Hence, the enhancement made by the CIT(A) is deleted. - Decided partly in favour of assessee.

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Addition of undisclosed sales.
3. Addition of toll charges.
4. Enhancement of addition on alleged purchases.

Condonation of Delay:
The appeal was filed with an 8-day delay, which the assessee attributed to reasons explained in an Affidavit. The Tribunal accepted the reasons as sufficient cause for the delay and proceeded to hear the appeal on merits.

Addition of Undisclosed Sales:
The Assessing Officer noted a variance in sales figures declared by the assessee in the VAT return and the trading account. The AO added the excess sales amount to the total income. The CIT(A) upheld the addition citing lack of justification by the assessee. The Tribunal upheld the addition of the undisclosed sales amount as the assessee failed to reconcile the difference, leading to the rejection of Ground No. 3.

Addition of Toll Charges:
The AO added toll charges paid by the IOC to the total income as it was not declared by the assessee. The CIT(A) confirmed this addition, stating that the amount should have been offered for tax. The Tribunal upheld the addition of toll charges, as the assessee did not dispute the nature of the amount, leading to the confirmation of the addition.

Enhancement of Addition on Alleged Purchases:
Discrepancies were noted in the purchases declared by the assessee and the IOC statement. The AO and CIT(A) made additions to the total income, with the CIT(A) enhancing the addition amount. The Tribunal upheld the initial addition of &8377; 4,526 but deleted the enhancement, emphasizing the reliance on the IOC statement for purchases. Therefore, Ground No. 5 was partly allowed.

In conclusion, the appeal filed by the assessee was partly allowed, with the Tribunal upholding certain additions to the total income while modifying others based on the discrepancies and evidence presented during the proceedings.