ANGEL PUMPS PVT LTD,RAJKOT vs. DCIT, CIRCLE-1(1), RAJKOT, RAJKOT

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ITA 610/RJT/2025Status: DisposedITAT Rajkot12 August 2026AY 2018-195 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the addition was based on an apparent factual discrepancy in the turnover figures adopted by the Assessing Officer. The Tribunal restored the matter to the Assessing Officer for fresh verification of the turnover figure and reconciliation.

What were the facts?

The assessee declared a total income of Rs. 1,19,39,460/-. The Assessing Officer made an addition under Section 68 on account of an alleged difference in turnover between VAT/GST returns and ITR statements. The assessee contended this was a factual mistake and provided reconciliation.

What were the issues?

Whether the addition made under Section 68 was based on a correct and verifiable turnover figure, and if not, whether it requires fresh verification by the Assessing Officer.

Which sections of the Income-tax Act were involved?

Section 68,Section 115BBE,Section 154,Section 250,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Rajkot Bench, Rajkot

Before: Dr. BRR Kumar & Shri Sonjoy Sarma

For Appellant: Shri Mehul Ranpura, Ld. AR
For Respondent: Shri Ramesh Tiwari, Ld. CIT(DR)
Hearing: 29/07/2026Pronounced: 12/08/2026

आयकर अपीलीय अिधकरण, राजकोट �यायपीठ, राजकोट। In The Income Tax Appellate Tribunal, Rajkot Bench, Rajkot Before Dr. BRR Kumar, Vice President And Shri Sonjoy Sarma, Judicial Member आयकर अपील सं./ITA No. 610/RJT/2025 [ �नधा�रण वष�/Assessment Year: 2018-19 ] Angel Pumps Pvt. Ltd. The Deputy Commissioner of Income- Plot No.G-1604 to 1607-B, Gate No.2, tax, Circle-1(1), Vs. GIDC Lodhika, Metoda, Dist. Rajkot- Aayakar Bhavan, Race Course Ring 360021, Gujarat Road, Rajkot-360001, Gujarat �थायीलेखासं./जीआइआरसं./PAN/GIR No.: AACFL5762C (अपीलाथ�/Appellant) (��यथ�/Respondent) Appellant by : Shri Mehul Ranpura, Ld. AR Respondent by : Shri Ramesh Tiwari, Ld. CIT(DR) Date of Hearing : 29/07/2026 Date of Pronouncement : 12/08/2026

:: ORDER :: Per, Shri Sonjoy Sarma, JM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2018-19, is directed against the order under section 250 of the Income-tax Act, 1961 [hereinafter referred to as ‘the Act’] passed by the Commissioner of Income Tax (Appeals) [hereinafter referred to as ‘Ld.CIT(A)’], dated 23.07.2025, which in turn arises out of rectification order passed by assessing officer u/s. 154 of the Act, dated 10.02.2022.

2.

Brief facts of the case are that the assessee, Angel Pumps Private Limited, filed its return of income for the Assessment Year 2018–19 on 28.09.2018, declaring a total income of Rs.1,19,39,460/-. The case was selected for scrutiny, and the

ITA No. 610/RJT/2025 Angel Pumps Pvt. Ltd. assessment was completed under section 143(3) of the Income-tax Act, 1961 vide order dated 09.04.2021, determining the total income at Rs.12,80,73,417/- after making, inter alia, an addition under section 68 of the Act on account of the alleged difference in turnover reflected in the VAT/GST returns and the ITR statements. Subsequently, the assessee filed an application under section 154 of the Act contending that the addition was based on an apparent factual mistake. It was submitted that the aggregate turnover disclosed in the VAT/GST returns amounted to Rs.77,01,42,841/-, whereas the turnover reflected in the ITR was Rs.72,98,45,611/-. According to the assessee, the apparent difference stood fully reconciled after making statutory adjustments, namely: (i) stock transfers from the head office to branches, (ii) excise duty collected on sales, (iii) commercial discount included in VAT/GST returns but excluded from taxable turnover in the financial statements, and (iv) other miscellaneous adjustments. It was, therefore, contended that there was no unexplained suppression of sales and that the addition under section 68 of the Act had been made due to an apparent mistake of fact. The Assessing Officer, however, rejected the rectification application vide order dated 10.02.2022 passed under section 154 of the Act holding that the issue did not involve any mistake apparent from the record but required detailed examination and interpretation, which fell outside the scope of section 154 of the Act.

3.

Aggrieved by the said order, the assessee preferred an appeal before the Ld. Commissioner of Income-tax (Appeals). The Ld. CIT(A), National Faceless Appeal Centre, vide order dated 23.07.2025 passed under section 250 of the Act, dismissed the appeal and upheld the action of the Assessing Officer. The assessee is, therefore, in further appeal before the Tribunal.

4.

Still aggrieved by the order of the Ld.CIT(A) assessee is appeal before this Tribunal. At the time of hearing the Ld. AR submitted that the Assessing Officer

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ITA No. 610/RJT/2025 Angel Pumps Pvt. Ltd. committed a fundamental factual error while comparing the turnover disclosed in the ITR statements with the turnover reported in the VAT/CST/GST returns. It was contended that the aggregate turnover as per the VAT/CST/GST returns was Rs.77,01,42,841/-, which, after giving effect to statutory adjustments such as branch transfers, excise duty, commercial discounts and other miscellaneous adjustments aggregating to Rs.4,02,97,230/-, duly reconciled with the turnover of Rs.72,98,45,611/- reflected in the audited financial statements and the return of income. The Ld. AR further submitted that, despite the above reconciliation, the Assessing Officer, in the assessment order, recorded the turnover as per the GST return at Rs.65,50,15,224/-. According to the assessee, this figure has no nexus whatsoever with the VAT/CST/GST returns or any material furnished during the assessment proceedings. The assessee was unable to ascertain the source or basis from which the Assessing Officer derived the said figure. It was argued that the Assessing Officer appears to have treated the difference between the audited turnover of Rs.72,98,45,611/- and the erroneous figure of Rs.65,50,15,224/-, amounting to Rs.7,48,30,387/-, as unexplained income and consequently made an addition under section 68 read with section 115BBE of the Act. According to the Ld. AR, the addition is founded entirely upon an incorrect and unexplained figure adopted by the Assessing Officer and not upon the turnover actually disclosed by the assessee in its VAT/CST/GST returns. The Ld. AR therefore contended that the figure of Rs.65,50,15,224/- requires verification at the level of the jurisdictional Assessing Officer. If, upon such verification, it is found that the said figure does not emanate from the records furnished by the assessee, the very basis of the addition of Rs.7,48,30,387/- under section 68 read with section 115BBE of the Act would cease to exist. Accordingly, it was prayed that the matter be restored to the file of the jurisdictional Assessing Officer for the limited purpose of verifying the source and correctness of the figure adopted as turnover in the assessment order and to decide

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ITA No. 610/RJT/2025 Angel Pumps Pvt. Ltd. the issue afresh in accordance with law after granting the assessee an adequate opportunity of being heard

5.

On the other hand, the Ld. DR supported the orders of the authorities below.

6.

We have heard the rival submissions and perused the material available on record. We find that the addition of Rs.7,48,30,387/- under section 68 read with section 115BBE of the Act appears to have arisen on account of an apparent factual discrepancy in the turnover figures adopted by the Assessing Officer. The assessee has placed on record a detailed reconciliation demonstrating that the aggregate turnover as per the VAT/CST/GST returns was Rs.77,01,42,841/-, which, after making statutory adjustments aggregating to Rs.4,02,97,230/-, reconciles with the turnover of Rs.72,98,45,611/- disclosed in the audited financial statements and the return of income. However, the Assessing Officer, while framing the assessment, adopted the figure of Rs.65,50,15,224/- as the turnover reflected in the GST returns and treated the difference between the said figure and the audited turnover, amounting to Rs.7,48,30,387/-, as unexplained income under section 68 of the Act. From the records placed before us, it is not visible as to the source or basis from which the Assessing Officer derived the aforesaid figure of Rs.65,50,15,224/-. Prima facie, the said figure does not appear to have any correlation with the turnover disclosed by the assessee in the VAT/CST/GST returns or the reconciliation statement furnished before the authorities. Since the correctness of the figure adopted by the Assessing Officer goes to the root of the addition made under section 68 read with section 115BBE of the Act, we are of the considered view that the matter requires fresh factual verification at the level of the jurisdictional Assessing Officer. Accordingly, in the interest of justice, we set aside the impugned order on this issue and restore the matter to the file of the Assessing Officer with a direction to verify the source and correctness of the turnover figure of Rs.65,50,15,224/-

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ITA No. 610/RJT/2025 Angel Pumps Pvt. Ltd. adopted in the assessment order, examine the reconciliation furnished by the assessee and pass an order in accordance with law after affording the assessee a reasonable opportunity of being heard.

7.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on this 12th day of August, 2026.

Sd/- Sd/- [ Dr. BRR Kumar] [ Shri Sonjoy Sarma ] Vice President Judicial Member राजकोट/Rajkot िदनांक/ Date: 12/08/2026 Copy of the order forwarded to : 1. The assessee 2. The Respondent 3. CIT 4. The CIT(A) 5. DR, ITAT, Rajkot 6. Guard File By order //True Copy// Sr. Private Secretary ITAT, Rajkot

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