9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (2) TMI 110 - AT - Income TaxDifference in stock noticed on the date of survey - difference of stock between stock as per books of accounts as on the date of survey and stock physically found on the date of survey was found - HELD THAT - CIT(A) has not taken into account the conciliation statement which was filed before the authority. The assessee pointed out to the authorities that in view of existence of all the units in the common compound inter mingling of stock among the units was possible and the partner s statement cannot be the sole criteria for making addition to that extent. From the perusal of the records related to the reconciliation filed by the assessee it appears that the excess stock claimed by the Revenue / Assessing Officer is not properly verified. Therefore, it will be appropriate to remand back this issue to the file of the Assessing Officer for proper adjudication of the issues - Ground No. 1 is partly allowed for statistical purpose. Sales made out of books - A.R. submitted that when the purchases were fully accepted during the survey the sale cannot be doubted. In fact, sales are higher than the loose papers and in that respect correct Gross Profit should have been taken into account - HELD THAT - From the perusal of records and the reconciliation filed by the assessee the CIT(A) has not taken the cognizance of the same, hence this issue also needs verification. Therefore, we remand back this issue to the file of the Assessing Officer for proper adjudication after taking into account all the evidences as well as reconciliation statement filed by the assessee and decide accordingly. Needless to say, the assessee be given opportunity of hearing by following principle of natural justice. Thus, Ground No. 2 is partly allowed for statistical purpose. Addition on account of debit of cash discount pertaining to prior period - A.R. submitted that the CIT(A) as well as the AO ignore this fact that said claim crystallized during the year only - HELD THAT - It is pertinent to note that the debit of cash discount pertaining to prior period has been crystallized during the year only and not prior or any subsequent year, therefore, the addition made by the Assessing Officer and CIT(A) is not correct. Hence, Ground No. 4 is allowed. Rejection of book of accounts u/s 145 - addition by estimating gross profit rate - HELD THAT - It is pertinent to note that the assessee has taken cognizance of the sales and the G.P. rate followed accordingly was taken into account by the assessee. The rejection of book was no proper as the assessee has already followed the method of accounting which was continuously followed in the previous and subsequent years. In fact, inflation brokerage and transportation brokerage not claimed separately so there was no reopening made on earlier occasions. The comparable which was cited by the Assessing Officer were never confronted to the assessee. Thus, this needs verification and therefore, the entire issue is remanded back to the file of the Assessing Officer for proper adjudication - Ground Nos. 1 2 are partly allowed for statistical purpose. Unexplained credits/unaccounted sales noticed in the impounded material and not found recorded in the books of accounts - HELD THAT - It is pertinent to note that the assessee has given the details of purchase and the subsequent sales in entirety and the evidences placed before the Assessing Officer was not taken into account by both the authorities. Therefore, this issue needs verification and we remand back this issue to the file of the Assessing Officer for proper adjudication. Needless to say, the assessee be given opportunity of hearing by following principle of natural justice. Ground No. 3 is partly allowed for statistical purpose. Discrepancy in stock found on the date of survey on the basis of statement of director - A.R. submitted that this addition was contrary on the basis of statement and no proper adjudication was made by the assessee - HELD THAT - It is pertinent to note that the alleged discrepancy in the stock found on the date of survey on the basis of statement of director was never established by the Assessing Officer with the proper reasoning that the statement of director was verifiable from the said stocks available at a survey premises. There was no independent finding given by the Assessing Officer related to the said addition and therefore, this addition does not sustain. Ground No. 4 is allowed. Addition u/s 68 for unexplained credit in the name of Mehta Kantilal Nandlal - A.R. submitted that the assessee has already filed confirmation related to the same and also filed repayment details - HELD THAT - As perused all the relevant material available on record. The assessee has also filed confirmation of the parties and also filed the repayment in respect of these credits of Rs. 80,000/- and the same was not taking into account by the Assessing Officer as well as CIT(A) while confirming the addition. Hence, Ground No. 1 is allowed. Understatement of Net Profit without finding any defect in the books - HELD THAT - It is pertinent to note that in similar type of addition in another group case involved relating to survey of the same date the Tribunal has deleted the similar addition - Besides these books of accounts were never rejected by the Assessing Officer and the requisite trading account up to the date of survey was also before the Assessing Officer, therefore, the CIT(A) as well as Assessing Officer was right in making this addition. Hence, the Ground No. 2 is allowed.
Issues Involved:
1. Addition of Rs. 1,48,29,750/- on account of alleged difference in stock. 2. Addition of Rs. 12,03,545/- for alleged sales made out of books. 3. Disallowance of Rs. 17,895/- for delayed payment of Provident Fund. 4. Addition of Rs. 24,658/- on account of debit of cash discount pertaining to prior period. 5. Rejection of book results by invoking provisions of section 145 of the Act. 6. Addition of Rs. 1,40,72,777/- by estimating gross profit rate. 7. Addition of Rs. 1,09,60,980/- on account of alleged unexplained credits/unaccounted sales. 8. Addition of Rs. 77,86,000/- on account of alleged discrepancy in stock. 9. Addition of Rs. 80,000/- u/s 68 for alleged unexplained credit. 10. Addition of Rs. 15,00,000/- on account of alleged understatement of net profit. Issue-wise Detailed Analysis: 1. Addition of Rs. 1,48,29,750/- on account of alleged difference in stock: The assessee argued that the CIT(A) erred in confirming this addition, stating that the reconciliation statement showed a shortage of only Rs. 1,17,81,330/-. The valuer allegedly did not account for the actual stock. The Tribunal found that the CIT(A) did not consider the reconciliation statement and noted the intermingling of stock among units. The issue was remanded back to the Assessing Officer for proper adjudication, ensuring the assessee is given a hearing opportunity. Thus, this ground was partly allowed for statistical purposes. 2. Addition of Rs. 12,03,545/- for alleged sales made out of books: The assessee contended that the purchases were accepted during the survey, so the sales should not be doubted. The Tribunal observed that the CIT(A) did not consider the reconciliation statement and remanded the issue back to the Assessing Officer for verification. The assessee should be given a hearing opportunity, and thus, this ground was partly allowed for statistical purposes. 3. Disallowance of Rs. 17,895/- for delayed payment of Provident Fund: The assessee did not press this ground as it was decided against them by the Jurisdictional High Court. Hence, this ground was dismissed. 4. Addition of Rs. 24,658/- on account of debit of cash discount pertaining to prior period: The Tribunal noted that the debit of cash discount crystallized during the year in question, not prior or subsequent years. Therefore, the addition made by the Assessing Officer and CIT(A) was incorrect. Hence, this ground was allowed. 5. Rejection of book results by invoking provisions of section 145 of the Act: The assessee argued that the Assessing Officer rejected the books without cogent reasons, despite accepting sales and other trading elements. The Tribunal found that the method of accounting was consistently followed in previous and subsequent years, and the comparable cited by the Assessing Officer was not confronted to the assessee. The issue was remanded back for proper adjudication, ensuring the assessee is given a hearing opportunity. Thus, this ground was partly allowed for statistical purposes. 6. Addition of Rs. 1,40,72,777/- by estimating gross profit rate: The Tribunal noted that the assessee had consistently followed the method of accounting, and the rejection of books was improper. The issue was remanded back to the Assessing Officer for proper adjudication, ensuring the assessee is given a hearing opportunity. Thus, this ground was partly allowed for statistical purposes. 7. Addition of Rs. 1,09,60,980/- on account of alleged unexplained credits/unaccounted sales: The assessee argued that Rs. 20,00,000/- offered was not considered, and the valuation of sales was improper. The Tribunal found that the details of purchases and subsequent sales were not properly considered by the authorities. The issue was remanded back to the Assessing Officer for proper adjudication, ensuring the assessee is given a hearing opportunity. Thus, this ground was partly allowed for statistical purposes. 8. Addition of Rs. 77,86,000/- on account of alleged discrepancy in stock: The Tribunal found that the alleged discrepancy based on the director's statement was not properly established by the Assessing Officer. There was no independent finding related to the addition. Hence, this ground was allowed. 9. Addition of Rs. 80,000/- u/s 68 for alleged unexplained credit: The assessee provided confirmation and repayment details which were not considered by the authorities. The Tribunal allowed this ground, noting that the evidence provided was not taken into account. 10. Addition of Rs. 15,00,000/- on account of alleged understatement of net profit: The Tribunal found that the books were never rejected, and similar additions in another group case were deleted. The requisite trading account was before the Assessing Officer, and thus, the addition was incorrect. Hence, this ground was allowed. Conclusion: ITA No. 1293/Ahd/2016 and ITA No. 1294/Ahd/2016 were partly allowed for statistical purposes, while ITA No. 1296/Ahd/2016 was allowed.
|
