2015 (11) TMI 11 - AT - Income Tax

Difference between sales tax order and the sales made to the total income of the assessee - assessee submitted that there was difference in turnover disclosed to the sales tax department and the turnover disclosed to the Income tax department on account of inclusion of Mahamai, handling charges and transit insurance and if the above items are excluded, there will be no difference of turnover disclosed to the sales tax department and the income tax department - Held that - The assessee has not properly reconciled the two turnovers before the Assessing Officer and only argued without any supportive evidence. Thus it is appropriate to remit the issue back to the file of the Assessing Officer with a direction to the assessee to properly reconcile these two turnovers with supportive evidence before the Assessing Officer. Accordingly, this issue is remitted back to the file of the Assessing Officer for fresh consideration. - Decided in favour of assessee for statistical purposes.

Summary

Issues involved: Discrepancy in turnover disclosed to sales tax and income tax departments, addition made by Assessing Officer, appeal before Commissioner of Income Tax (Appeals), lack of evidence to support grounds of appeal, remittance of issue back to Assessing Officer for reconciliation.

Analysis:

1. Discrepancy in Turnover: The case involved a search under section 132 of the Income Tax Act in the case of a firm and its partners. During assessment proceedings, it was found that the turnover declared to the sales tax department differed from the turnover admitted to the income tax department. The Assessing Officer made additions to the income based on this difference for the assessment years 2004-05 and 2005-06.

2. Appeal before Commissioner of Income Tax (Appeals): The assessee appealed against the additions made by the Assessing Officer. However, the Commissioner of Income Tax (Appeals) upheld the additions, stating that the assessee did not provide any material or evidence to support their grounds of appeal. The Commissioner found that the figures of turnover as per the Sales Tax Order and the turnover admitted by the assessee were recorded in the assessment orders without any contradiction.

3. Lack of Evidence: The Commissioner noted that the assessee failed to provide any evidence to dispute the turnover figures recorded in the assessment orders. The absence of material or evidence to support the grounds of appeal led to the decision to uphold the additions made by the Assessing Officer.

4. Remittance of Issue: The Accountant Member of the ITAT Chennai observed that the assessee did not properly reconcile the turnovers before the Assessing Officer and only argued without supportive evidence. As a result, the issue was remitted back to the Assessing Officer with a direction for the assessee to reconcile the turnovers properly with supportive evidence.

5. Final Decision: The Appellate Tribunal partly allowed the appeals for statistical purposes and remitted the issues back to the Assessing Officer for fresh consideration. The decision was made to ensure proper reconciliation of turnovers with supporting evidence before reaching a final conclusion on the additions made by the Assessing Officer.

This detailed analysis of the judgment highlights the key issues, the arguments presented, and the decision-making process involved in addressing the dispute regarding the turnover discrepancies between the sales tax and income tax departments.