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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI INTURI RAMA RAO & SHRI PARTHA SARATHI CHAUDHURY
आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM:
This appeal preferred by the assessee emanates from the order of the Ld. CIT(Appeals)-2, Pune dated 15.03.2017 for the assessment year 2012-13 as per the following grounds of appeal on record:
“1. That on the facts and in law the Commissioner of Income Tax (Appeals)-2 have erred in confirming the addition made of Rs.64,69,182/- by Assessing Officer on account of difference in closing balance in the trade creditors A/c. That the addition made by the AO and confirmed by the CIT(A) was without appreciating the facts and same deserves to be deleted. 2. That your appellant prays that he may be allowed to add, amend the above ground of appeal.”
The brief facts of the case are that the assessee is an individual and is involved in the business of manufacturing of note books, account books and also doing the same on job work basis under the name of the proprietary concern M/s. Dhanalaxmi Enterprises. The only issue raised in the grounds of appeal is against the addition of Rs.64,69,182/- being the amount of un- reconciled credit. During the assessment proceedings, the Assessing Officer noticed that the assessee had shown an amount of Rs.1,19,52,877/- against the creditor Kokuyo Camlin Ltd. Mumbai as against debit entry shown by Kokoyo Camlin Ltd. in their books at Rs.1,83,86,216/-. Since the difference of Rs.64,69,182/- was not reconciled during the assessment proceedings and therefore, the Assessing Officer added the differential amount of Rs.64,69,182/- to the total income.
3. The Ld. CIT(Appeals) on this issue has held and observed as follows:
“4.3 I have perused the facts of the case, submission made on behalf of the appellant as well as contents of the remand report. It is seen that the addition of Rs.64,69,182/- was made due to un-reconciled amount of credit balance of M/s. Kokoyo Camlin Ltd. Mumbai. The Assessing Officer during the remand proceedings conducted necessary verification with M/s. Kokoyo Camlin Ltd., however in absence of proper compliance on the part of M/s. Kokoyo Camlin Ltd., the difference could not be reconciled. Even the appellant did not make any effort to reconcile this difference. The credit entries pertain to the appellant and the appellant is equally responsible to explain the difference which was not done by him. I therefore find no reason to be at variance with the order of the AO. His order is accordingly confirmed.”
We observe from record that vide Para 4.1 of the Ld. CIT(Appeals)‟s order, he had called for remand report vide letter dated 08.09.2016 and the Assessing Officer had submitted remand report on 17.02.2017. That in remand report, it is stated that the Assessing Officer had issued notice u/s.133(6) of the Income Tax Act, 1961 (hereinafter referred to as „the Act‟) to M/s. Kokuyo Camlin Ltd. That on perusal of the same, it was noticed that the said letter was issued on 27.03.2015 asking to submit information by 20.03.2015 which was not possible at all. That the Assessing Officer in the remand report commented that perhaps, it is a typographical error and details which were actually called for to be submitted within 28.03.2015 having limited time to complete the assessment. We, thereafter, find that the assessment order was passed on 31.03.2015. That even if the comment of the Assessing Officer in the remand report is accepted that there is typographical error in respect of date of providing information in respect to the notice u/s.133(6) of the Act, however, the fact of the matter is with such limited time for completion of the assessment, ample opportunity was not provided to the assessee. There must be some judicious process for reconciliation to this difference in closing balance in creditors account. That also, reasonable opportunity must be given to the assessee to substantiate its case on merits.
Therefore, we are of the considered view that the matter should be restored to the file of the Assessing Officer wherein another opportunity should be provided to the parties concerned and explanation should be called for from M/s. Kokuyo Camlin Ltd. and the Assessing Officer should re- adjudicate this issue as per law following the principles of natural justice. In view thereof, we set aside the order of the Ld. CIT(Appeals) and restore the matter to the file of the Assessing Officer as indicated hereinabove.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on 04th day of February, 2021.
Sd/- Sd/- INTURI RAMA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER ऩुणे / Pune; ददनाांक / Dated : 04th February, 2021 SB आदेश की प्रनिलऱपप अग्रेपषि / Copy of the Order forwarded to : अऩीऱाथी / The Appellant. 1. प्रत्यथी / The Respondent. 2.
The CIT(Appeals)-2, Pune.