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Income Tax Appellate Tribunal, “B” BENCH KOLKATA
Before: Shri Sanjay Garg & Dr. Manish Borad
order : September 12, 2023 आदेश / ORDER संजय गग�, �या�यक सद�य �वारा / Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 28.02.2023 of the National Faceless Appeal Centre (hereinafter referred to as the ‘CIT(A)’) passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). 2. The assessee in this appeal has taken the following grounds of appeal:
1. that on the facts and in the circumstances of the case as well as law on the subject, the NFAC/Ld. CIT(A) has erred in passing ex-parte order without giving proper opportunity to the appellant of being heard.
Assessment year: 2013-14 Naresh Chandra Das 2. that on the facts and circumstances of the case, the NFAC/Ld. CIT(A) erred in confirming addition of Rs. 52,99,281/- towards alleged undisclosed income without going into the merits of the claim by the appellant in respect of accounting of Purchases and Credit Notes during the year. 3. that on the facts and circumstances of the case as well as on law on the subject, the NFAC/Ld. CIT(A) erred in confirming the addition of Rs.1,34,982/- u/a. 40A(3) without considering that no cash payment was made on 27.11.2012 or on any other day as alleged to Nagarjuna Fertilizer & Chemicals. 4. that on the facts and circumstances of the case, the NFAC/Ld. CIT(A) erred in confirming the mistake of the Ld. Assessing Officer when he had, in computation of total income in his order u/s. 143(3)/263, taken total income as per 143(3) as Rs. 29,15,197/- instead of Rs. 25,64,197/- as per order u/s. 143(3) / 251 of the Income Tax Act thereby making an addition of Rs.3,51,000/- for which a relief was allowed by Ld. CIT(Appeals). 5. that on the facts and in the circumstances of the case as well as on law, the order of NFAC/Ld. CIT(A) is not in accordance of the requirements of Sec 250 (b) of Act mandating that the Ld. CIT(A) is required to pass the order on points of determination, in the manner prescribed in law. 6. that the appellant craves leave to file additional grounds and/or amend or alter the grounds already taken, either before or at the time of hearing of the appeal.”
Ground No.1 – The assessee has not pressed Ground No.1. Therefore, Ground No.1 is dismissed as not pressed.
Ground No.2 – Vide Ground No.2, the assessee has agitated the confirmation of addition of Rs.52,99,281/- made by the Assessing Officer on account undisclosed purchases.
The brief facts relevant to the issue are that the Assessing Officer during the assessment proceedings noted that there was a difference of the amount of purchase shown by the assessee from certain credit notes furnished by the assessee. Since, the assessee could not reconcile the Assessment year: 2013-14 Naresh Chandra Das difference of Rs.52,00,000/- on account of purchases through credit notes, therefore, the Assessing Officer treated the said purchases as undisclosed and added the entire amount of difference of Rs.52,99,281/- into the income of the assessee.
The ld. CIT(A) confirmed the additions so made by the Assessing Officer. 7. Before us, the ld. counsel for the assessee has submitted that all the purchases were accounted for in the books of account. That it was not a case of making of purchases out of any undisclosed income of the assessee. That even if the assessee could not reconcile the figure of purchases at the most only the profit element involved relating to the sales made out of the said purchases can be added. That the Assessing Officer has found the difference in purchases out of books of account only and it was not a case of purchases out of books of account. The ld. counsel has submitted that the aforesaid difference might have occurred due to some accounting/valuation method. However, it was not a case of purchases out of undisclosed income. 8. The ld. DR has also fairly agreed that at the most the profit element involved in relation to the said purchases can be added into the income of the assessee. 9. The ld. counsel has demonstrated that the average profit rate on purchases of the assessee was 2.2% of the purchases. 10. In view of the above submissions, the impugned addition made by the Assessing Officer is set aside and the addition is restricted to 2.2% of the amount of un-reconciled difference in purchases of Rs.52,99,281/-. This Ground of the assessee’s appeal is accordingly partly allowed.