9911796707
TMI Blog2022 (2) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... ention of the assessee as aforestated. The same therefore cannot form the basis for rejecting the assesses explanation, we hold. Similarly, we find that in the case of VAT while the assessee's explanation of VAT debited to the profit and loss account was that it represented the excess of amount of VAT receivable on purchases as against amount payable on sales and which was not available for set off, the Ld. CIT(A) has rejected the same by stating that the assessee has shown the same amount of VAT as debited in the profit and loss account as receivable in his balance sheet The presumption of the Ld. CIT(A), is therefore probably that the VAT receivable was very much available for set off as per the books of the assessee and as opposed to that claimed by it that it was not available for set off. We find that this finding of the Ld. CIT(A) is not based on correct appreciation of facts. Firstly as per double entry system of accounting which is universally followed for book keeping every transaction is represented by both debiting and crediting different accounts. And the outstanding debit and credit balances in the different accounts are reflected either in the profit and los ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ples of natural justice. 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the submissions made and evidence produced by the appellant with regard to the impugned additions. 2.1 The Ld. CIT(A) has grievously erred in law and on facts in confirming that the notice of reopening issued u/s. 148 and the proceedings u/s. 147 were valid and justified in law. 2.2 That in the facts and circumstances of the case as well as in law, the Ld. CIT(A) ought to have held that the notice u/s. 148 and the proceedings u/s. 147 initiated by AO both were illegal and unlawful. 3.1 The Ld. CIT(A) has erred in law and or in facts upholding the additions amounting to ₹ 27,24,159/- made towards excise duty, CST VAT. 3.2 That in the facts and circumstances of the case as well as in law, the Ld. CIT(A) ought to have deleted the additions amounting to ₹ 27,24,159/- made towards excise duty, CST VAT. Both the lower authorities have failed to appreciate the method of accounting followed by the appellant. 4.1 Without prejudice to above and in the alternative the Ld. CIT(A) has failed to appreciate that the addition to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and loss account and there was no question of the purchases being booked inclusive of taxes and duties. That the amount of VAT, Excise duty and CST which was actually debited to the profit and loss account pertained to those amounts paid on purchases whose credit could not be availed by the assessee and did not pertain at all to the entire purchases made by the assessee. 8. In this regard, we find that the assessee had evidenced his contention by demonstrating the accounting for sales and purchases net of taxes in its books of accounts by placing copies of the following accounts for the year before the lower authorities a) the purchase account, b) the Excise duty account, c) CST account and d) VAT account 9. He also placed copies of bills of purchases along with the journal vouchers reflecting the fact that the purchase bills were accounted for net of duties and taxes. The same were also placed before us in a paper book at pages 75-128. 10. The submission of the assessee before the AO explaining the nature of the amounts of VAT, Excise duty and Cess debited to the profit and loss account filed on 23/08/2016 reproduced at page 9 of the Ld. CIT(A) is as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available and hence was an expense for the assessee. 12. The Revenue authorities we find have failed to controvert/point out any infirmity in the aforesaid contention of the assessee duly evidenced with documents as noted above. Even before us the Ld. DR was unable to controvert the contention of the assessee. 14. In view of the uncontroverted factual contention of the assessee evidenced with documents to the effect that sales and purchases were booked net of taxes by it, the finding of the revenue authorities that the assessee had debited duties and taxes paid on purchases while reflecting sales net of taxes thus resulting in claim of excess deduction of the said taxes/duties, stands ousted. 15. The Ld. CIT(A), we find though has appeared to have appreciated the contention of the assessee that the duties and taxes debited to the profit and loss account represented that portion of the duties and taxes which could not be set off against the taxes required paid by the assessee on sales, But at the same time, we find, he has come up with his own logic and reasoning for dismissing the same and which to our mind makes no sense at all. 16. The Ld. CIT(A) has rejected the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss account. The reasoning of the Ld. CIT(A) talks about entire CST sale made by the assessee in its different branches for dismissing this contention of the assessee, which does not address the specific contention of the assessee that the same related to Pune Branch alone and could be set off against CST sales in Pune which were not there. The fact that assessee had made total CST sales of 10.59 crores does not help the case of the Revenue in meeting and controverting the specific contention of the assessee as aforestated. The same therefore cannot form the basis for rejecting the assesses explanation, we hold. 18. Similarly, we find that in the case of VAT while the assessee's explanation of VAT debited to the profit and loss account was that it represented the excess of amount of VAT receivable on purchases as against amount payable on sales and which was not available for set off, the Ld. CIT(A) has rejected the same by stating that the assessee has shown the same amount of VAT as debited in the profit and loss account as receivable in his balance sheet. The relevant findings of the Ld. CIT(A) to this effect at Para 4.1.3 of his order is as under: 4.1.3. In respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had arisen in A.Y. 2014-15 also and the reply of the assessee had been accepted by the AO making no addition. Copies of the reply filed and the assessment order of that year were also filed to the Ld. CIT(A). The submission of the assessee to the Ld. CIT(A) to the above effect 11-07-16 reproduced at page 9 of the CIT(A)'s order is as under: 10. During the assessment proceeding of the A.Y. 2014-15, same issue has been raised by the Ld. AO and we have replied on the same line, which was accepted by the Ld. AO and no addition has been made by the Ld. AO. Copy of our reply as well as Assessment Order has been attached here with for your kind reference. 21. The aforestated contention has also remained uncontroverted by the Revenue. Therefore even by the principle of consistency the impugned addition was not warranted. 22. In view of the above, we hold that the revenue authorities have proceeded on totally incorrect interpretation of facts of the case while making the impugned addition of ₹ 27,24,159/- on account of Excise duty, VAT and CST debited to the profit and loss account which we find the assessee had duly explained for doing so and it is clearly not a case ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
