EMERSON MEASUREMENT SYSTEMS AND SOLUTIONS (INDIA) PRIVATE LIMITED,VADODARA vs. THE DY. CIT, CIRCLE-1(1)(1), VADODARA

The assessee is engaged in the business of manufacturing and sale of natural gas and liquid flow measurement products and systems. The assessee filed its return of income for Assessment Year 2012-13 declaring a total income of Rs.8.47 crores. The case was selected for scrutiny and notices under section 143(2) of the Income-tax Act, 1961, along with other statutory notices, were issued by the Assessing Officer. During the course of assessment proceedings, the Assessing Officer called for reconciliation of receipts appearing in Form 26AS with the receipts recorded in the Profit & Loss account of the assessee. On verification, it was noticed by the Assessing Officer that the gross receipts as reflected in Form 26AS amounted to Rs.13.32 crores, whereas the receipts recorded in the books of account were Rs.12.39 crores. Accordingly, a difference of Rs.92,59,170/- was identified. The Assessing Officer required the assessee to explain and reconcile the said difference with supporting evidence. However, according to the Assessing Officer, the assessee failed to furnish a satisfactory reconciliation or supporting evidence to substantiate that the difference represented advances or other reconciling items. Accordingly, the Assessing Officer treated the said difference as unexplained receipts and added Rs.92,59,170/- to the total income of the assessee, considering the assessee’s method of accounting as mercantile system. Asst. Year : 2012-13 - 3–

Heard the rival contention and perused the material available on record.

We have gone through the assessment order and examined the material available on record. We find that the addition of Rs.91,59,170/- has been made solely on the basis of a difference between receipts reflected in Form 26AS and the receipts recorded in the books of account of the assessee. The assessee has contended that the said difference has already been reconciled and that the corresponding receipts have been duly offered to tax in the relevant assessment years. However, it is observed that the reconciliation and supporting evidences furnished by the assessee have not been properly examined by the Assessing Officer in a comprehensive manner. In the interest of justice and fair adjudication, we are of the view that the matter requires primary verification at the level of the Assessing Officer. Accordingly, we set aside the impugned addition of Rs.91,59,170/- to the file of the Assessing Officer for authentication. The Assessing Officer is directed to verify the reconciliation statement and supporting evidences furnished by the assessee, examine whether the receipts have been correctly accounted for in the respective assessment years, and then decide the issue afresh in accordance with law after granting adequate opportunity of being heard to the assessee. Asst. Year : 2012-13 - 4–

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

""थ" / The Respondent. 3. संबंिधत आयकर आयु" / Concerned CIT 4. आयकर आयु"(अपील) / The CIT(A)- 5. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड" फाईल / Guard file.