MADHUR VEGOLIS PVT LTD vs. INCOME TAX OFFICER

Facts

The assessee, Madhur Vegoils Private Limited, filed an appeal before the High Court of Judicature for Rajasthan, Jaipur Bench, challenging a judgment of the Income Tax Appellate Tribunal (ITAT), Jaipur Bench, dated 31.07.2017. The ITAT's order had set aside an assessment order passed by the Assessing Officer (AO) and remanded the matter back to the AO for de novo assessment. During the pendency of the appeal before the High Court, the assessee produced a copy of a fresh assessment order dated 28.12.2018, which was passed pursuant to the ITAT's remand directions. The High Court noted that the assessee had participated in the proceedings before the AO.

Held

The High Court held that it would not be appropriate to decide the present appeal on merits. This was because a fresh assessment order had been passed on 28.12.2018, in terms of the order of the Income Tax Appellate Tribunal. The Court noted that the assessee had the opportunity to participate in the proceedings before the Assessing Officer and present its case. Therefore, the appeal was dismissed as having become infructuous. The appellant was, however, granted liberty to appeal against the fresh assessment order and challenge it on all available legal grounds.

Key Issues

1. Whether, under the garb of rejection of books of accounts, huge trading additions can be legally justifiable when the defects pointed out, if any, were minor defects and no defect was pointed out in the opening stock, purchases, sales, closing stock, and stock-register? (Question of law/mixed law and fact). Assessee's contention: The assessee argued that the defects in the books of accounts were minor and that crucial elements like opening stock, purchases, sales, closing stock, and stock-register were not found to be defective. Therefore, substantial trading additions based on the rejection of books were not legally justifiable. Revenue's contention: The judgment does not record any specific contentions made by the revenue regarding this issue.