M/S AMUDHA ASEPTIC FOOD PRODUCTS,KRISHNAGIRI vs. ITO, WARD-1, KRISHNAGIRI

This appeal by the assessee is arising out of the order of the Principal Commissioner of Income Tax, Coimbatore-1, vide revision order No.PCIT, Coimbatore-1/ Revision-263 /100000191577/2021 dated 30.03.2021. The assessment was framed by the Income Tax Officer, Ward-1, Krishnagiri, for the AY 2016-17, u/s.143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’) vide order dated 21.12.2018.

The first issue in this appeal of the assessee is as regards to the order of the PCIT, the revision order u/s.263 of the Act, is that the assessment order framed u/s.143(3) of the Act, dated 21.12.2018, the original assessment order is neither erroneous nor prejudicial to the interest of the Revenue for the reason that the assessee has accounted for the machinery properly, has paid advance of Rs.31,25,445/- and balance figure of Rs.1,06,05,755/- appears in Sundry Creditors.

We have heard rival contentions and gone through the facts and circumstances of the case. We noted that the PCIT in its revision order noted that there is a discrepancy in purchase of machinery from M/s.Divine Agri Pvt. Ltd., Singapore, as the assessee has not accounted machinery properly in its books of accounts, the PCIT noted that the assessee company has purchased the above mentioned machinery for an amount of Rs.1,37,31,200/- on credit but disclosed outstanding of Rs.1,06,05,755/-. According to the PCIT, AO failed to verify the purchase of machinery and consequently liability arising to the above sundry creditors at the time of passing of assessment order and accordingly, invoked the Explanation-2 to Sec.263 of the Act. He directed the AO to verify the purchase of machinery and accounting of the same in its books of accounts. Before us, the ld.Counsel for the assessee stated that consequential order u/s.143(3) r.w.s.263 of the Act, with sec.144B of the Act, dated 30.03.2022, is passed and the AO in that order has only directed to disallow depreciation on machinery to 15% on the amount

Coming to the second issue on revision order in regard to accounting of closing stock, the ld.Counsel for the assessee pointed out that the AO while giving effect to the revision order u/s.143(3) r.w.s.263 of the Act, accepted the claim of the assessee as correct and hence, this ground has become infructuous. Hence, no need to adjudicate this ground. The revision order is sustained and the appeal filed by the assessee is partly allowed.

In the result, the appeal filed by the assessee is partly allowed.