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Issues:
Reduction of addition on account of suppression of sales from Rs. 12,27,938 to Rs. 2,00,000. Analysis: The Revenue contended that the AO had valid reasons for the substantial addition due to suppression of sales. The appellant was involved in purchasing bran/rice, processing, and exporting to sister concerns. The AO rejected the book results due to discrepancies in purchase figures and lack of proper records. The Departmental Representative supported the AO's decision, citing a Kerala High Court judgment upholding additions based on succeeding year results. The Revenue argued that the entire addition should have been confirmed based on the yield disclosed by the assessee in a previous year. The assessee's counsel argued that despite the addition, the final assessed income was a loss. They highlighted the eligibility for deduction under s. 80HHC due to high export turnover. The counsel emphasized that the yield declared by the assessee was reasonable, especially considering it was the first year of business. A certificate from the All India Rice Exporter's Association supported the assessee's yield claim. The counsel also pointed out minor discrepancies in purchase figures provided during assessment. The CIT(A) upheld a reduced addition of Rs. 2,00,000, which the assessee accepted due to no tax effect. After reviewing submissions and orders, it was noted that the assessee had not claimed depreciation and suffered a significant loss. The AO's substantial addition based on higher yield was contrasted with the assessee's declared yield. The Tribunal found no motive for understating yield given the substantial losses and lack of claimed deductions. Minor discrepancies in purchase quantities were deemed addressed by the reduced addition upheld by the CIT(A), which the assessee accepted without appeal. Concluding, the Tribunal found the CIT(A)'s decision reasonable and justified, seeing no grounds to interfere. The Revenue's appeal was dismissed, affirming the reduced addition of Rs. 2,00,000.
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