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TMI Blog2022 (11) TMI 1299X X X X Extracts X X X X X X X X Extracts X X X X ..... tly reported by way of export sales. It is noted that once the sales made to M/s Pacific Jute Ltd is excluded, the sales to related entities within the territory of India (excluding deemed exports) which was lower than the overall local sales - In the circumstances impugned addition made by way of unrecorded local sales was untenable on the given facts of the case - Decided in favour of assessee. Addition u/s 68 - unexplained increase in short term borrowings under the head advance received from the parties and increase in liability under the had trade payables for goods - CIT(A) considered the submissions of the assessee including the tax audit report and other details/particulars, deleted the addition - HELD THAT:- AO did not cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tices u/s. 143(2) and 142(1) of the Act. Various details were called by the ld. AO and submissions were filed by the assessee. After considering the same and examining the Form 3CD part of audit reports found that the assessee made sales amounting to Rs.25,90,66,090/- with the following parties: S. No. Name PAN Sale Amount 01. Mohan Jute Bags Mfg.Co. AAFFM3412R 104748831 02. Pacific Jute Ltd AACCM2063J 67645271 03. Global Exim P.Ltd AADCG0037H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count of addition made u/s 68 of Rs.2,28,39,613/deemed income 3. The appellant craves the leave to make any addition, alternation, modification, etc. of the grounds either before the appellate proceedings, or in the course of appellate proceedings. 7. The Ld. Departmental Representative vehemently argued supporting the order of the ld. AO. 8. Per contra, the Ld. Counsel for the assessee vehemently argued supporting the detailed findings of the ld. CIT(A) and also various details filed in the paper book. 9. We have heard the rival contentions and perused the material placed before us. 10. Apropos the first issue regarding deletion of addition at Rs. 6,54,12,545/-, which was made by the ld. AO towards undisclosed sales for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e there was a apparent mismatch between the domestic sales reported in P L A/c and the domestic sales reported in the tax audit report and therefore' assessed the difference of Rs.6,54,12,545/[ Rs.25,90,66,090 Rs. 19,36,53,545] by way of unrecorded sales of the appellant company. 3. In the appellate proceedings the Ld. AR of the appellant submitted that the AO wrongly understood the facts of the case. He pointed out that the sales made to M/s Pacific Jute Ltd aggregating to Rs.6,76,45,271/was reported by way of export sales since M/s Pacific Jute Ltd located in a notified SEZ and hence the sales thereto constituted 'deemed exports. In support thereof he furnished the ledgers of the domestic sales export sales along with samp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directed to delete the same, Ground No. 1 is therefore allowed. 11. The above finding remains uncontroverted by the ld. Departmental Representative and since the assessee has successfully explained the alleged difference, we fail to find any infirmity in the finding of ld. CIT(A). Thus, ground no. 1 raised by the revenue is dismissed. 12. Apropos the second issue regarding deletion of addition at Rs. 2,28,39,613/-, which was made by the ld. AO towards unexplained increase in short term borrowings under the head advance received from the parties to the extent of Rs. 1,29,29,108/- and increase in liability under the had trade payables for goods to the extent of Rs. 99,10,505/-,treated the same as income u/s. 68 of the Act. Ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y dismissed. 4. For the reasons set out above therefore I am of the considered view that the Ld. AO was unjustified in adding the net increase in current liabilities of Rs.2,28,39,613/by invoking Section 68 of the Act. The Ld. AO is accordingly directed to delete the impugned addition in full. Ground No. 2 is therefore allowed. 13. The above findings of the ld. CIT(A) remains uncontroverted by the ld. DR, therefore, we fail to find any infirmity in the findings of the ld. CIT(A). Thus, ground no. 2 raised by the revenue is dismissed. Ground no. 3 is general in nature, which requires no adjudication. 14. In the result, the appeal of revenue is dismissed. Order pronounced in open court on 28-11-2022 - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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