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TMI Blog2018 (8) TMI 2087X X X X Extracts X X X X X X X X Extracts X X X X ..... in doing so, he ought to have, in the interest of the assessment, or should we say proper assessment, acted earlier in requisitioning the same from the Customs Department. The idea or the purpose of the foregoing is not to apportion the blame, which no doubt lies substantially at the door of the assessee inasmuch as it is he who has to make the compliances in discharge of his statutory duties, but, rather, to emphasize that the same is both futile as well as facile inasmuch as the assessment, as made, cannot be approved of. Under the circumstances, we only consider it proper that the matter, setting aside the impugned order, is restored back to the file of the AO for adjudication afresh in accordance with law after allowing the assessee a reasonable opportunity to state his case with reference to the various queries raised or that maybe raised in the said set aside proceedings. - I.T.A. No. 335/Asr/2016 - - - Dated:- 17-8-2018 - Sh. Sanjay Arora, Accountant Member And Sh. N. K. Choudhry, Judicial Member For the Appellant : Sh. R. K. Magow (C.A.). For the Respondent Sh. Charan Dass (D.R.). ORDER Per Sanjay Arora, AM: This is an Appeal by the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the various queries or doubts that the AO may entertain on an examination of the assessee s accounts, in fact even gathering material in rebuttal of that furnished. All this requires time. The cash-book, furnished on 28.12.2011 (at 4.30 p.m.), is stated by the AO to be incomplete and incorrect in-as-much as some entries in the loose papers obtained by the customs authorities were, upon confrontation to the assessee, found not entered in the cash-book (refer paras 5.3 and 6.5 of the assessment order). There are other apparent differences. The total cash deposited in bank, explained to be by way of cash sales, stands worked out by the AO at Rs.1469.79 lacs. The cash sales admitted by the assessee, however, are at Rs.1380.69 lacs. Even assuming, as stated, the deposit of the entire cash sales in the bank account, which though would require verification (w.r.t. day to day account of cash, i.e., cash book) there is admittedly an additional deposit of Rs.89.10 lacs, the source of which would need to be ascertained with reference to the cash-book or otherwise explained, i.e., besides the entries in the loose sheets recovered (supra) from the assessee. For all we know, it may well be th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merit, though that would not preclude the Revenue from verifying the truthfulness of the assessee s accounts, which admittedly purport to reflect the true state of the assessee s affairs, and of its business. Two, even assuming no such sales, the purchases from these (four) parties would need to be investigated to see if the same finally translated into any exports, even down the line, and that if these were genuine; the Revenue (in the Customs Department) suspecting which would presumably be on the basis of some materials, as not genuine, and being with a view to defraud the Government through claims of duty drawback, etc. Again, it may well be that the purchases from these parties are out of imports made by them, either directly or down the line. The matter could only be finally determined upon being examined. The result of an investigation by the Customs Department itself may be relevant. In fact, even ignoring the aspect of any fraudulent activity, as afore-stated, the question of the correctness and completeness of the assessee s accounts (in reflecting the true state of his business), held to be a commission business, survives. The finding of the commission business, we ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rived at. The ld. CIT(A) has, without appreciating the inchoate state of determination, adjudicated thereon, confirming it, for which we find little basis. Besides being inconsistent with the facts and circumstances, the law postulates that an appellate authority corrects all the errors of the lower authorities. The Apex Court in Kapurchand Shrimal v. CIT [1981] 131 ITR 451 (SC) held that an appellate authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions (to the authority against whose decision the appeal is preferred) to dispose of the whole or any part of the matter afresh unless forbidden for doing so by the statute. As aforestated, could the finding of the accounts being incorrect and incomplete be made in the wake of incomplete verification, which must therefore be taken to its conclusion? How, for example, the trade balances/transactions regarded as true without confirmation? Again, the cash deposits in the bank account/s need to be properly explained. The claim of cash sales itself needs to be examined. This is for the simple reason that that the same constitutes a very larg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said documents, which has not been shown. The AO provided the same to the assessee on 19/12/2011, i.e., after obtaining the same from the Customs Department. While the AO indeed acted proactively in doing so, he ought to have, in the interest of the assessment, or should we say proper assessment, acted earlier in requisitioning the same from the Customs Department. The idea or the purpose of the foregoing is not to apportion the blame, which no doubt lies substantially at the door of the assessee inasmuch as it is he who has to make the compliances in discharge of his statutory duties, but, rather, to emphasize that the same is both futile as well as facile inasmuch as the assessment, as made, cannot be approved of. Under the circumstances, we only consider it proper that the matter, setting aside the impugned order, is restored back to the file of the AO for adjudication afresh in accordance with law after allowing the assessee a reasonable opportunity to state his case with reference to the various queries raised or that maybe raised in the said set aside proceedings. We may, however, not be construed as having issued any finding of fact. We decide accordingly. 4. In the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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