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Income Tax Appellate Tribunal, “C” BENCH : BANGALORE
Before: SHRI N. V. VASUDEVAN & SHRI A. K. GARODIA
M/s UEI Electronics Pvt. Ltd., No. 49, First Floor, East Wing, DCIT Circle – 7 (1) (1), Khanija Bhawan, Race Course Road, Vs. Bengaluru Bangalore– 560001 PAN : AAACU9402D APPELLANT RESPONDENT Assessee by : Shree Nageswar Rao, Advocate Revenue by : Smt. R. Premi, JCIT DR Date of hearing : 21.10.2020 Date of Pronouncement : 21.10.2020 O R D E R PER ARUN KUMAR GARODIA, A. M.:
This appeal is filed by the assessee and the same is directed against the order of CIT (A) – 7 Bengaluru dated 08.03.2019.
Although the assessee has raised as many as five grounds of appeal but the grievance of the assessee is only one about disallowance of the claim of the assessee of the provision of Rs. 55,10,985/- towards sales return for which the provision was made by the assessee in the present year on the basis of actual sales return in the next year.
3. In course of hearing, learned AR of the assessee submitted that in Para 4.2 of his order, learned CIT (A) has stated that sales return is after four years of sale but this finding of CIT (A) is incorrect because almost about 90% of sales return provided for in the present year and in support of this, the assessee has submitted additional evidence running into 172 pages which contain mainly Debit Notes issued by the customers and other supporting to establish that about more than 90% of the sales return is in respect of sales of the present year only and therefore, the tribunal order rendered in the case of Bayer Bio Science Pvt. Ltd., 20 Taxman.com 79 is applicable and this issue is covered in favour of the assessee by this tribunal order but the learned CIT (A) has distinguished the same on the basis of incorrect facts that the sale return is not in respect of sales of the present year. He submitted that these additional evidences should be admitted and the matter may be restored to CIT (A) for a fresh decision after considering the same. As against this, learned DR of the revenue supported the order of CIT (A). She also submitted that since sales return is admittedly in next year, it should not be allowed in the present year and it should be allowed in the next year only when the sales return has actually happened. In the rejoinder, learned AR of the assessee submitted that the assessee has not claimed the deduction for sales return in next year and it is not allowed also in the next year.
4. We have considered the rival submissions and in the facts of the present case, we admit the additional evidences because it goes to the root of the matter to examine and decide about this factual aspect as to regarding sales return provided for by the assessee in the present year, which is the year of sale because this is the claim of the assessee that about 90% of the same is sale of the present year but as per CIT (A), it is on account of sale of earlier years. Therefore, we admit the additional evidence and set aside the order of CIT (A) and restore the matter to the file of CIT (A) for a fresh decision after examining the veracity of the claim of the assessee that about 90% of sales return in question is in respect of sales of the present year. Learned CIT (A) should give a detailed finding in this regard and thereafter, should consider the applicability of the tribunal order rendered in the case of Bayer Bio Science Pvt. Ltd. (Supra) and decide the issue as per law after providing adequate opportunity of being heard to both sides.
In the result, the appeal of the assessee is allowed for statistical purposes.