2020 (11) TMI 465 - AT - Income Tax

Suppression of commission income - net addition made granting deduction for license fees paid and shortages - According to the assessee the data with respect to the computation of suppress commission does not belong to the assessee even though they had made elaborate submissions and interacted before the Ld.AO as well as before the Ld.CIT(A) to defend the case - HELD THAT - We wonder as to why this discrepancy was not pointed out before the Ld. AO or even before the Ld. CIT (A) by the assessee or by her Ld.AR. It is quite possible that there may have been a hotch potch in adopting the correct data by the Ld.AO when information is obtained with respect to various dealers from different source. Though the assessee had shown negligence during the course of the respective proceedings before the Ld. Revenue Authorities and even when I find the elaborate exercise undertaken by the Ld. AO to be quite appealing, it is not appropriate to adopt the data belonging to some other assessee while computing the addition in the hands of the assessee. Therefore hereby remit back the matter to the file of the Ld. AO for de novo consideration - advise the assessee to be vigil during the course of the proceedings before the Ld. Revenue Authorities in order to avoid such hotch potch.

Summary

Issues involved:
- Appeal against order confirming findings of the Assessing Officer regarding suppression of commission income.
- Consideration of additional evidence filed by the assessee before the Tribunal.
- Discrepancy in data used by the Assessing Officer for computation of suppressed commission.
- Failure of the assessee to point out discrepancies before the Assessing Officer and the CIT (A).
- Decision to remit the matter back to the Assessing Officer for fresh consideration.

Analysis:

Issue 1: Appeal against order confirming findings of the Assessing Officer regarding suppression of commission income
- The assessee appealed against the order of the Ld. CIT (A) confirming the findings of the Ld. AO regarding the suppression of commission income. The Ld. AO computed the suppressed commission income based on information obtained from various sources, including oil corporations and government websites. The assessee argued that the shortage in turnover was due to discounts offered to customers, not suppression of commission income. However, the Ld. CIT (A) upheld the order, stating that the assessee failed to provide evidence to support her claims. The Ld. CIT (A) found the arguments submitted by the assessee to be academic and lacking merit, ultimately dismissing the appeal.

Issue 2: Consideration of additional evidence filed by the assessee before the Tribunal
- The assessee submitted additional evidence before the Tribunal, claiming that the turnover data considered by the AO did not pertain to her. The Ld. AR requested the Tribunal to remit the matter back to the AO for fresh consideration based on this new evidence. The Ld. DR opposed the admission of the additional evidence, alleging that it was a tactic to delay proceedings. After considering the submissions, the Tribunal found the negligence of the assessee in not pointing out the discrepancy earlier. Despite this, the Tribunal decided to remit the matter back to the AO for fresh consideration in the interest of justice.

Issue 3: Discrepancy in data used by the Assessing Officer for computation of suppressed commission
- The Tribunal noted a discrepancy in the data used by the AO for computing the suppressed commission income. The data related to a different dealer, not the assessee. The Tribunal found it inappropriate to use data belonging to another assessee to calculate additions in the hands of the present assessee. Therefore, the Tribunal remitted the matter back to the AO for de novo consideration to rectify this error.

Issue 4: Failure of the assessee to point out discrepancies before the Assessing Officer and the CIT (A)
- The Tribunal observed that the assessee and her representative failed to point out the discrepancy in the data used by the AO during the assessment and appellate proceedings. The Tribunal emphasized the importance of vigilance during proceedings to avoid such errors and discrepancies in the future.

Issue 5: Decision to remit the matter back to the Assessing Officer for fresh consideration
- Despite the negligence on the part of the assessee, the Tribunal decided to remit the matter back to the AO for fresh consideration due to the discrepancy in the data used for computation. The Tribunal advised the assessee to be vigilant during proceedings to prevent such discrepancies in the future.

This detailed analysis covers the key issues involved in the legal judgment delivered by the Appellate Tribunal ITAT Hyderabad.