ITO 6(1)(2), MUMBAI vs. M/S ANIMS CONNEXION PVT LTD, MUMBAI

The ld. DR submits that during the course of assessment proceedings, the assessee had submitted reconciliation of sale as per sales register and P & L A/c, however, no supporting documents in respect of commission, sales returns and bank receipts were furnished by the assessee. The Assessing Officer (AO) has categorically mentioned in the order that a notice was issued to the assessee on 26.09.2018 to furnish proof of commission, sales return and bank receipts. No explanation and supporting evidences were filed by the assessee, hence, the addition was made by the AO. The CIT(A) has deleted above-said additions without examining the relevant documents.

Per contra, Ms. Nimisha Udeshi, Director of the assessee-company submitted that the assessee had furnished all the relevant documents before the AO and the CIT(A), the CIT(A) after examining the same deleted the addition. She referred to para-3.2 of the impugned order in support of her contention.

Both sides heard, orders of the authorities below examined. The Revenue is in appeal against the findings of the CIT(A) in deleting addition in respect of आ.अ.सं. 584/मुं/2020 (िन.व. 2011-12) (A.Y.2011-12) commission, sales returns and bank receipts. The contention of the Revenue is that no supporting documents were furnished by the assessee, whereas, the stand of the assessee is that the relevant documents were furnished, after examining the same, the CIT(A) has allowed relief to the assessee. The relevant extract of the impugned order whereby the CIT(A) has deleted the additions is reproduced herein below for ready reference: “3.2 I have carefully gone through the assessment order as well as the written submission made by the assessee. It is seen that the assessee reconciled Sales as per Sales Register for FY 2010-11 and Profit & Loss account. The amount of Rs.8,04,753 added by the A.O. comes out of three invoices of Rs.6,44,359, Rs.93,075 and Rs.90,792 excluding the commission and taxes. On detailed verification the amounts it is found that the amounts are reconciled. It noticed that one sale of 2008-09 and one sale of 2009-10 are reversed by issuing credit notes (to raise the new invoice in another entity of the group with a later date), which is claimed as Sales Return. As the assessee did not receive payment against the invoice accounted, it could have claimed the same as Bad debts also. One entry of Rs.90,792 is reversed during the current year on 16.11.2010 which is reduced as sales return, essentially it was a bad debt and the assessee may have claimed as such as bad debt. Regarding the Rs.3,57,041 added by the AO, the assessee explained that it is commission income offered to tax as part of other income of Rs.4,95,432 appearing in Profit & Loss account. Breakup of Rs.4,95,432 is verified and found that Rs.3,57,041 has been offered to tax. Rs.20,000 found credited in the bank account statement is not a income but a transfer amount. Therefore all the amounts added by the AO on account of insufficient explanation at the time of assessment are found explained by the assessee with documents. In view of the above facts and circumstances, I find the explanation and evidences filed by the assessee are in order. Therefore, A.O. is directed to deleted the addition of difference of Rs.11,81,794 since the same is reconciled and आ.अ.सं. 584/मुं/2020 (िन.व. 2011-12) (A.Y.2011-12) explained and the finding of the AO in the assessment is not correct. These grounds of appeal

6. The ld. DR has not been able to controvert the categoric findings given by the CIT(A) deleting the addition after examining the documents furnished by the assessee. In absence of any contrary material, I find no reason to interfere with the findings of the First Appellate Authority.