INTEGRA AUTOMATION PRIVATE LIMITED,COIMBATORE vs. CORPORATE CIRCLE 1(1) CHE, CHENNAI

This appeal filed by the assessee is directed against the order dated 27.02.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2018-19.

The assessee raised 7 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the addition made by the Assessing Officer under section 69A of the Income Tax Act, 1961 [“Act” in short] in the facts and circumstances of the case.

Brief facts of the case are that the assessee filed return of income for the AY 2018-19 declaring income of ₹.9,46,86,290/-. The return filed by the assessee was selected for limited scrutiny to verify the claim of any other amount allowable as deduction in Schedule BP, expenditure of personal nature and duty drawback. Against statutory notices, the assessee furnished the details as called for. From the details furnished by the assessee, the Assessing Officer noted that the assessee has admitted duty drawback of ₹.20,02,882/- received from the Government of India. The Assessing Officer received information, from the Central Board of Excise and Customs (CBEC), the agency which determine and disburse the drawback, that the total exports of the assessee was ₹.10,16,12,519/- and duty drawback determined and paid was ₹.21,52,100/-. Accordingly, the Assessing Officer asked the assessee to explain the shortfall of ₹.1,49,218/- (21,52,100 – 20,02,882) and reconcile the duty drawback incentive received from CBEC. Vide letter dated 21.02.2020, the assessee asked the Assessing Officer to provide breakup of the CBEC data on bill-wise. However, the Assessing Officer could not furnish the same before completion of the assessment order. Since the assessee has not received the breakup of the CBEC data on bill-wise, the assessee could not able to reconcile and since the assessee has not reconciled and explained the difference between CBEC data and amount admitted by the assessee, the Assessing Officer treated the difference amount of ₹.1,49,218/- as undisclosed money under section 69A of the Act and added to the returned income of the assessee and completed the assessment under section 143(3) r.w.s. 143(3A) & 143(3B) of the Act dated 11.01.2021.

The assessee carried the matter in appeal before the ld. CIT(A) and furnished complete details and explanations along with bill-wise break up details of the duty drawback as per books of account of the assessee. Since the assessee could not furnish the reconciliation of duty drawback before the Assessing Officer, the ld. CIT(A) confirmed the addition made in the assessment order. On being aggrieved, the assessee is in appeal before the Tribunal.

The ld. AR Shri B. Sivaraman, C.A. drew our attention to para 7.2 at page 6 of the impugned order and submits that inspite of specific requisition made to the Assessing Officer to provide individual bill-wise details of the duty drawback, the assessee was provided with only the gross duty drawback and thereby, the assessee was not in a position to reconcile the duty drawback as per its books and the CBEC report. The ld. AR prayed that suitable direction may be given to the Assessing Officer to examine the reconciliation statement that may be filed by the assessee and to decide the issue on merits by affording reasonable opportunity to the assessee.

The ld. DR Ms. R. Anita, Addl. CIT did not oppose the submissions of the ld. AR.

Heard both the parties and perused the material available on record. In this case, since the assessee could not reconcile the difference of duty drawback receipts as per CBEC data and assessee’s books of account, the Assessing Officer treated the same as undisclosed money under section 69A of the Act and completed the assessment, which was confirmed by the ld. CIT(A). On perusal of para 3.1(d) of the assessment order, we note that the assessee has requested to provide information about duty drawback as per CBEC data received by the Department and the same was provided to the assessee on 03.10.2020. We also note that the assessee has furnished bill-wise breakup details of the duty drawback as per assessee’s books before the ld. CIT(A) as well as before the Tribunal in the form of paper back pages 20 to 22. Under the above facts and circumstances of the case, we set aside the order of the ld. CIT(A) and remand the matter to the file of the Assessing Officer with a direction to examine the reconciliation statement that may be filed by the assessee and to decide the issue on merits in accordance with law. Thus, the ground raised by the assessee is allowed for statistical purposes.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 10th July, 2025 at Chennai.