SRI BALAJI SEA FOOD,CHENNAI vs. ITO,NCW9(4), CHENNAI

आदेश / O R D E R

PER MANJUNATHA.G, ACCOUNTANT MEMBER:

This appeal filed by the assessee is directed against the order of the

Commissioner of Income Tax (Appeals)-10, Chennai, dated 24.02.2020

and pertains to assessment year 2016-17.

by the assessee. During the course of hearing, when defect was brought

to the notice of the learned AR present, he has submitted that delay in filing

of appeal is mainly due to lockdown imposed by the Govt. on account of

spread of Covid-19 infections and which needs to be excluded for

ITA No.793/Chny/2020 :: 2 ::

computing limitation in view of judgment of the Hon’ble Supreme Court in

Miscellaneous Petition No.21 of 2022 in Suo Motu Writ Petition (C) No.3 of

2020, if the period of delay is covered within the period specified in the

order of the Apex Court, then same needs to be condoned in view of specific

problem faced by the public on account of Covid-19 pandemic.

2.1 The learned DR, on the other hand, fairly agreed that delay may be

condoned in the interest of justice.

2.2 Having heard both sides and considered reasons given by the learned

AR, we find that the Hon’ble Supreme Court in Miscellaneous Petition No.21

of 2022 in Suo Motu Writ Petition (C) No.3 of 2020, has extended limitation

applicable to all proceedings in respect of Courts and Tribunals across the

country on account of spread of Covid-19 infections w.e.f. 15.03.2020, till

further orders and said general exemption has been extended from time to

time. We further noted that delay noticed by the Registry pertains to the

period of general exemption provided by the Hon'ble Supreme Court

extending limitation period applicable for all proceedings before Courts and

Tribunals and thus, considering facts and circumstances of the case and

also in the interest of natural justice, we condone delay in filing appeal filed

by the assessee.

1.1 The CIT(A) erred in confirming the addition of Rs.7,41,23,0137- as unaccounted sales in a summary manner without proper appreciation of facts of the case.

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1.2 The CIT(A) ought to have noted that the Assessee had agreed to produce the vouchers, Bills, accounts including the omitted turnover upon which the entire addition was made.

1.3 The CIT(A) having taken note of the specific ground raised for the production of evidences under Rule 46A in respect of addition of unaccounted sales held that the request of the assessee cannot be entertained at this stage which is bad in law and is violative of the provisions of Income Tax Act.

1.4 The CIT(A) having himself noted that his powers are co-terminus with that of the AO, ought to have examined the additional evidences himself or called for a remand report from the Assessing Officer.

1.5 In any event, the CIT(A) ought to have taxed the proportionate profit element out of the sales that was omitted by the Assessee.

2.1 The CIT(A) erred in confirming the disallowance of Rs.3,52,5897- on account of freight charges.

2.2 The CIT(A) erred in not considering the details filed by the Assessee in a proper perspective.

2.3 The CIT(A) having noted that the Assessee had agreed to produce vouchers and bills as additional evidences upon which the entire addition was made, ought to have directed the AO to verify the same.

3.1 The CIT(A) erred in confirming the addition of Rs.6,94,636/- being excess claim of salary & wages.

3.2 The CIT(A) failed to consider the details filed by the Assessee in a proper perspective.

3.3 The CIT(A) having noted that the Assessee having volunteered to produce vouchers and supporting evidences in relation to this addition, ought to have directed the AO to verify the same.

engaged in the business of export of sea foods such as fresh and live crabs

chilled and frozen shrimps. The assessee had filed its return of income for

the AY 2016-17 on 05.09.2017 admitting total income of Rs.NIL and

claimed current loss of Rs.3,81,545/-. The case was selected for scrutiny

and during the course of assessment proceedings, the AO noticed that there

was a difference of Rs.7,41,23,013/- in export sales turnover admitted by

the assessee in ITR filed for the relevant assessment year and as per the

information available with the Department in ITS Export/Import Summary

Data. The AO called upon the assessee to reconcile the difference in export

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turnover. Although, the assessee filed certain details, but could not

reconcile difference in export turnover as per its books and turnover as per

ITS data. Therefore, the AO has made addition of Rs.7,41,23,013/-. The

AO had also called for details of various expenses debited into P & L A/c,

but the assessee could not file any evidences and thus, the AO has

disallowed a sum of Rs.17,02,225/- towards disallowance of expenses and

added back to the total income.

appeal before the Ld.CIT(A). Before the Ld.CIT(A), the assessee challenged

additions made by the AO towards difference in export turnover along with

revised financial statement for the relevant assessment year and explained

that the turnover difference has been reconciled. The assessee had also

agitated disallowance of expenses with certain evidences. The Ld.CIT(A)

after considering relevant submissions of the assessee and also taken note

of revised financial statement filed by the assessee opined that the revised

financial statement submitted by the assessee are not audited and from

said statement, it cannot be ascertained how difference in sales turnover

has been reconciled. Therefore, rejected explanation furnished by the

assessee and sustained addition made towards difference in export

turnover amounting to Rs.7,41,23,013/-. In so far as disallowance of

various expenses, the Ld.CIT(A) has allowed relief towards disallowance of

Quality Certification Charges of Rs.3,60,000/- and also disallowance of

Export Inspection Charges of Rs.2,95,000/-. Further, in respect of

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disallowance of freight charges amounting to Rs.3,52,589/- and

disallowance of salary & wages of Rs.6,94,636/-, the Ld.CIT(A) has

confirmed the additions made by the AO on the ground that the assessee

could not file any evidences in support of expenses. Aggrieved by the order

of the Ld.CIT(A), the assessee is in appeal before us.

filed in the form of Paper Book, more particularly, sample shipping bills for

export of Fish & Prawns for the FY 2016-17 and abstract of shipping bills of

the assessee for both crabs and fish submitted that the difference in

turnover has been reconciled with necessary evidences and also filed

revised financial statement. The Ld.CIT(A) rejected revised financial

statement simply for the reason that said revised financial statement is

unaudited. Therefore, he submitted that one more opportunity of hearing

may be given to the assessee to file necessary evidences and reconcile

difference in turnover.

submitted that the assessee could not explain difference in export turnover

with necessary evidences either before the AO or before the Ld.CIT(A).

Further, even before the Tribunal, the assessee could not file any evidences

‘as to how’ difference in export turnover has been reconciled except

submitting certain sample shipping bills for exporting fish & prawns.

Therefore, he submitted that there is no reason to set aside the issue to

the file of the AO.

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record and gone through orders of the authorities below. The facts with

regard to the impugned dispute are that there is a difference in export

turnover reported in the ITR filed for the AY 2016-17 when compared to

export turnover as per ITS data available with the AO. It is also an admitted

fact that the assessee could not reconcile said difference with necessary

evidences. Even before the Ld.CIT(A), the assessee could not file any

evidences and reconciliation to explain difference in export turnover except

filing revised unaudited financial statement. Therefore, the Ld.CIT(A)

rejected arguments of the assessee and revised financial statement. Now,

the Ld.Counsel for the assessee submitted sample shipping bills for export

of fish and prawns, which is available in Page Nos.304-353 of Paper Book

filed by the assessee. The assessee had also filed abstract of shipping bills

for both crabs and fish which is available in Page Nos.293-303 of Paper

Book filed by the assessee. The assessee claims that one more opportunity

of hearing may be given to file necessary evidences and reconcile the

difference. We find that except filing sample shipping bills and abstract of

shipping bills, the assessee could not reconcile and explain the difference

in turnover even before us. However, fact remains that he is able to file

certain sample shipping bills and claimed that if one more opportunity of

hearing is given, he will be able to explain difference in turnover.

Therefore, considering the fact that the assessee has filed certain additional

evidences, we set aside the issue to the file of the Ld.CIT(A) for fresh

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consideration in light of certain additional evidences filed by the assessee.

Thus, we set aside the order of the Ld.CIT(A) on this issue and restore the

issue back to the file of the Ld.CIT(A) and direct the Ld.CIT(A) to re-

examine the claim of the assessee and decide the issue in accordance with

law. The Ld.CIT(A) may also take necessary report from the AO, if

required, on additional evidences filed by the assessee to decide the issue.

salary & wages, since we had restored the substantial issue of difference in

reconciliation of export turnover, these two issues are also set aside to the

file of the Ld.CIT(A) with a direction to re-examine the claim of the assessee

in light of evidences that can be filed during the course of appellate

proceedings.

purposes.

Order pronounced on the 31st day of March, 2023, in Chennai. Sd/- Sd/- (महावीर िसंह) (मंजूनाथा.जी) (MANJUNATHA.G) (MAHAVIR SINGH) उपा�� /VICE PRESIDENT लेखा सद�य/ACCOUNTANT MEMBER

चे�ई/Chennai, �दनांक/Dated: 31st March, 2023. TLN आदेश क� �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant 4. आयकर आयु�/CIT 2. ��यथ�/Respondent 5. िवभागीय �ितिनिध/DR 3. आयकर आयु� (अपील)/CIT(A) 6. गाड� फाईल/GF