RAVIRAJ VARADHARAJ,CHENNAI vs. INCOME TAX OFFICER,NCW 8(2), CHENNAI

Having heard both the parties and considering the submissions of the ld. AR and the ld. DR and in the interest of justice, we deem it proper to remand the matter to the file of the Assessing officer for fresh consideration to decide the issue afresh taking into account the submissions of the ld. AR that no loans were taken in the year under consideration and the addition made thereon is not maintainable. The assessee shall furnish the details, if any, in support of his claim. Thus, ground No. A raised by the assessee is allowed for statistical purposes.

Ground No. B, raised by the assessee in challenging the action of the ld. CIT(A) in restricting the addition made towards disallowance of expenses at 10% of the total expenses claimed. The Assessing officer decided the said issue in para 6.1 to 6.4 of the assessment order, wherein, for non submissions of bills and vouchers of transport charges paid, telephone expenses, maintenance expenses, etc., disallowed 20% of the total expenses [20% of ₹.17,47,950/- and added ₹.3,49,590/- to the income of the assessee vide para 7.3 of the 4 & S.A. No. 85/Chny25 assessment order. The ld. CIT(A) restricted the same to 10% vide para 5.1 of the impugned order.

After hearing both the parties, it is noted that the details of expenses were reproduced in page 10 of the assessment order, wherein, we of the opinion that the disallowance of 5% of total expenses is reasonable and accordingly, the disallowance of expenses is restricted to 5% of the total expenses i.e., ₹.87,398/- of total claim made by the assessee. Thus, ground No. B raised by the assessee is partly allowed.

Ground No. C, raised by the assessee in challenging the action of the ld. CIT(A) towards remission or cessation under section 41(1) of the Act. According to the Assessing Officer, no confirmation has been received from M/s. Fortune Agro Foods under section 133(6) of the Act to verify the genuineness of purchases made by the assessee. Further, the Assessing Officer observed that no E-way bills were submitted in respect of purchase made from Tamil Nadu Agro Foods, Vigneshwara Traders, Reshma and Associates and Quad Enterprises. Thus, the Assessing Officer adopted 20% of total sundry creditors and disallowed the same under section 41(1) of the Act vide his reasons recorded in 5 & S.A. No. 85/Chny25 para 7.4 of the assessment order. The ld. CIT(A) reduced to 15% of total sundry creditors as per para 5.2 of the impugned order.

The ld. AR vehemently argued that no GST registration is required for exempt goods as purchased from Fortune Agro Foods, Tamil Nadu Agro Foods, Vigneshwara Traders, Reshma and Associates and Quad Enterprises. The Assessing officer did not give the information regarding issuance of summons under section 133(6) of the Act to the above stated entities. He further argued that the disputed addition cannot be made under section 41(1) of the Act, which is not at all applicable for the issue and liable to be deleted.

The ld. DR vehemently argued that this point was not argued before the Assessing Officer/ld. CIT(A) and it is a fresh claim before the Tribunal. She submits that the issue may be remanded to the file of the Assessing Officer for fresh consideration in terms of the submissions of the ld. AR.

Having heard both the parties, we deem it proper to remand the matter to the file of the Assessing Officer for fresh consideration in terms of the contentions of the ld. AR raised before the Tribunal and the assessee is required to furnish all documentary evidence in support & S.A. No. 85/Chny25 his contention regarding no GST registration is required for the goods purchased from Fortune Agro Foods, Tamil Nadu Agro Foods, Vigneshwara Traders, Reshma and Associates and Quad Enterprises. Thus, ground No. C raised by the assessee is allowed for statistical purposes.

The Stay Application filed by the assessee in S.A. No. 85/Chny/2025, listed along with the main appeal. Since we have adjudicated the main appeal and partly allowed for statistical purposes, the stay petition filed by the assessee become infructuous and accordingly, the same stands dismissed.