AL TABARAK FROZEN FOODS P. LTD.,BULANDSHAHR vs. DCIT, UTTAR PRADESH

The assessee in the various grounds of appeal has challenged the part relief granted by the CIT(A) out of the addition of Rs.2,06,780/- made by the Assessing Officer on account of sundry creditors and the addition of Rs.8,11,043/- out of packing /processing charges.

Facts of the case, in brief, are that the assessee company is engaged in the business of meat processing on job work basis as well as purchase and sale of buffalo and Buffalo meat in local market. It filed its return of income on 29.09.2012 declaring total income of Rs.17,55,830/-. The Assessing Officer during the course of assessment proceedings observed that the letter issued u/s. 133 (6) to one of the creditors namely M/s. Mintor Trading Engineers, Rampur of Rs.2,06,780/- was not received. Since assessee could not satisfactorily explain by furnishing any evidence, the Assessing Officer made addition of Rs.2,06,780/- to the total income of the assessee.

In appeal the Ld. CIT(A) restricted the disallowance to 5% of the expenses. So far as the unconfirmed credit of Rs.2,06,780/- is concerned he did not accept the additional evidence filed before him and sustained the addition.

Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal.

The ld. Counsel for the assessee filed the following chart to show the expenses incurred during the year as well as in the preceding assessment year which are as under :-

Referring to the copy of the order of the Tribunal in assessee’s own case for A. Y.2010-11, he submitted that ad-hoc Page | 3 disallowance on account of packing (Labour) charges was deleted by the Tribunal. So far as the addition on account of unconfirmed sundry creditor is concerned he submitted that the Ld. CTI(A) is not justified in rejecting the confirmation filed before him which could not be obtained during the course of assessment proceedings. He accordingly submitted that he has no objection if the matter is restored to the file of the Assessing Officer.

The Ld. DR on the other hand heavily relied on the order of the CIT)A).

I have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the paper book filed on behalf of the assessee. I have also considered the various decisions cited before me. I find the Assessing Officer made addition of Rs.2,06,780/- being the credit balance in the name of M/s. Mintor Trading Engineers, Rampur on the ground that notice u/s.133 (6) was returned unserved and the assessee could not substantiate with any evidence to his satisfaction regarding such credit balances. Similarly the Assessing Officer made ad-hoc addition of Rs.8,11,043/- being 10% of the expenses incurred on account of packing charges (Labour) and processing charges (Labour) on account of possible leakage of revenue since some of the vouchers were not properly maintained. I find the Ld. CIT(A) restricted the disallowance to 5% of such expenses and Page | 4 confirmed the addition on account of un-substantiated creditor. It is the submission of the Ld. Counsel for the assessee that the Tribunal in the order for assessment year 2010-11 has deleted the ad-hoc disallowance of Rs.50,000/- on account of such processing charges and the confirmation given by the assessee on account of sundry creditor was rejected by the CIT(A) being additional evidences. It is also submission of the ld. Counsel for the assessee that the percentage of expenses to turnover is 8.44% for the impugned assessment year as against 10.53% in the preceding year. It is also his submission that he has no objection if the matter is restored to the file of the AO for fresh adjudication on both the issues.

Considering the totality of the facts of the case I agree with the request of the Ld. Counsel for the assessee that the matter may be restored to the file of the Assessing Officer for fresh adjudication. I, therefore, deem it proper to restore both the issues to the file of the Assessing Officer with a direction to give one final opportunity to the assessee to substantiate its case and decide the issue as per fact and law. I hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

In the result, the appeal filed by the assessee is allowed for statistical purpose.