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TMI Blog2023 (3) TMI 1462X X X X Extracts X X X X X X X X Extracts X X X X ..... light as to why cancellation of development agreement, was brought about. Insofar as addition on account of variation in turnover was concerned; the petitioner sought to explain the variation by filing reconciliation statement. This was brushed aside by the AO by holding that an adjustment made while reconciling the turnover figure in the ITR with the turnover figure appearing under the GST-1/GST-3B return had not been clarified. To our minds, had the AO granted personal hearing to the petitioner, some light may have been shone on this aspect of the matter. According to us, the best way forward would be to set aside the impugned assessment order. It is ordered accordingly. Liberty is, however, given to the AO to pass a fresh assessment order. - Hon'ble Mr. Justice Rajiv Shakdher And Hon'ble Ms. Justice Tara Vitasta Ganju For the Petitioner : Mr Ajay Vohra, Sr Adv. with Mr Rohit Jain, Mr Aniket D. Agrawal and Mr Samarth Chaudhari, Advs. For the Respondent : Mr Abhishek Maratha, Sr Standing Counsel with Mr Akshat Singh, Adv. JUDGMENT RAJIV SHAKDHER, J. (ORAL): 1. This writ petition is directed against the assessment order dated 22.04.2021 passed under Section 143(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a reply which, we are told, was uploaded on the designated portal on 17.03.2021. 5. Via this reply, the petitioner/assessee had furnished the details of the capital account and the ledger account concerning all three partners. 5.1 In the interregnum, the AO on 22.02.2021 had also issued yet another notice under Section 142(1) of the Act, wherein several other queries were raised, which were part of the annexure appended to the said notice. 6. As would be evident from a bare perusal of the impugned assessment order, only two additions were made to the petitioner/assessee s income, as indicated hereinabove. 7. Mr Ajay Vohra, learned senior counsel, who appears on behalf of the petitioner/assessee, says that in the assessment order, while making two additions regarding the compensation received by the petitioner/assessee, in respect of the development agreement which had been cancelled, certain observations have been made, to the effect that relevant documents were not furnished. 8. It is Mr Vohra s contention that after issuance of notice dated 04.03.2020, the AO did not call upon the petitioner/assessee to furnish any documents. 8.1 All that, according to Mr Vohra, the petitioner/as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een an infraction of principles of natural justice. As noted above, the petitioner was issued a notice dated 04.03.2020 under Section 142(1) of the Act, whereby queries were raised, including queries regarding additions that were eventually made in the instant case. 14. Via this notice, insofar as addition qua compensation received by the petitioner/assessee was concerned, information was sought only vis- -vis two aspects. 14.1 First, with regard to the capital account. 14.2 Second, with regard to the ledger account of the individual partners. 15. Insofar as the second aspect is concerned, i.e., variation in the turnover figures, as reflected in the ITR of the petitioner firm and in the returns filed under the Goods and Services Tax Acts, a reconciliation statement was furnished. 16. Concededly, the AO did not issue any other notice concerning these two additions. However, while passing the assessment order, the AO has found fault with the petitioner/assessee and observed the following with regard to the additions : From the contents of the above Note K-7 of the notes to account in the balance sheet it has been noticed that the alleged development agreement was executed by and ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its income during the year under consideration. Addition: Rs. 23,06,00,000/- [Emphasis is ours] 17. Insofar as the other addition is concerned, the following was recorded: Vide query no.3 to questionnaire issued alongwith notice u/s 142(1) dated 04/03/2020, the assessee was requested to explain the substantial variation in turnover shown by it in the ITR in comparison to turnover shown in GST-1/GST-3B return filed by the assessee company. In response to this query the assessee vide its letter dated 17/03/2021 has filed the reconciliation as per Annexure-3 thereto. This reconciliation has been examined and it is seen that in the reconciliation chart turnover including exports as per Audited Financial Statement (for multi GSTIN units) has been shown at Rs. 5,35,27,165/- and has made adjustment in the turnover due to the reason not listed at Sl. No. B to N in the said chart at Rs. 2,96,97,213/-. But adjustments of this amount have been made have not been clarified by the assessee company. In the absence of such clarification the same adjustment is not being allowed meaning thereby that addition of Rs. 2,96,97,213/- is being made to the income of the assessee company on account of var ..... X X X X Extracts X X X X X X X X Extracts X X X X
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