THE ASST. CIT, RAJAMAHENDRAVARAM vs. MS. COSTAL AUTOMOBILES PVT.LTD., RAJAMAHENDRAVARAM

ITA No.157 /Vizag/2017 & CO 76/Vizag/2017 M/s. Coastal Automobiles Pvt. Ltd., Rajamahendravaram आयकर अपील�य अ�धकरण, �वशाखापटणम पीठ, �वशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM �ी वी. दुगा�राव, �या�यक सद�य एवं �ी ड.एस. . . . सु�दर "संह, लेखा सद�य के सम% BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A.No.157/Vizag/2017 (�नधा�रण वष� / Assessment Year: 2012-13) ACIT, Circle-2(1) M/s. Coastal Automobiles Pvt.Ltd. Rajamahendravaram Rajamahendravaram [PAN No.AABCC5287H] (अपीलाथ' / Appellant) (()याथ' / Respondent) C.O.No.76/Vizag/2017 आयकर अपील सं./I.T.A.No.157/Vizag/2017 (�नधा�रण वष� / Assessment Year: 2012-13) M/s. Coastal Automobiles Pvt.Ltd. ACIT, Circle-2(1) Rajamahendravaram Rajamahendravaram (अपीलाथ' / Appellant) (()याथ' / Respondent) अपीलाथ� क� ओर से / Appellant by : Shri V. Appala Raju, DR : Shri G.V.N. Hari, AR ��याथ� क� ओर से / Respondent by

सुनवाई क� तार�ख / Date of hearing : 24.04.2018 : 26.04.2018 घोषणा क� तार�ख / Date of Pronouncement आदेश / O R D E R PER D.S. SUNDER SINGH, Accountant Member: This appeal filed by the revenue is directed against order of the Commissioner of Income Tax (Appeals)-2, Guntur vide Appeal No.150/2015-16 dated 5.1.2017 for the assessment year 2012-13. The cross objection filed by the assessee is in support of the order passed by the CIT(A)-2, Guntur. 1

ITA No.157 /Vizag/2017 & CO 76/Vizag/2017 M/s. Coastal Automobiles Pvt. Ltd., Rajamahendravaram 2. The revenue has filed the following grounds of appeal:

(i) The CIT(A) erred in giving blanket relief to the assessee without conducting any clinical examination of the facts and sans making any reconciliation of the gross receipts with reference to the discrepancy pointed out by the Assessing Officer. (ii) The CIT(A) ought to have called for a remand report from the Assessing Officer, particularly when the assessment was done ex-parte u/s 144 of the Act before giving relief. (iii) The CIT(A) ought to have set a rider to the Assessing Officer to examine the accountability of the receipts vis-à-vis TDS certificates and other information available on record, rather than giving full relief to the assessee without adjudicating the facts and merits of the case which are very much available on record. (iv) Any other ground that may be urged at the time of appeal hearing.

All the grounds of appeal are related to the addition made by the

A.O. in respect of difference in turnover amounting to ` 1,25,48,381/-.

In this case, the assessee filed return of income on 29.9.2012 declaring

total income of ` 31,73,316/-. During the course of assessment

proceedings, the A.O. has posted the case on number occasions and

there was no compliance from the assessee. In respect of details called

for by the A.O., the assessee did not submit the details and has not

complied with the notices issued by the A.O. and the same is evident

from the para No.3 of the assessment order. Since the assessee failed

to furnish the details called for, the AO completed the assessment as per

the information available on record u/s 143(3) r.w.s. 144 of the Act. In

the process, the A.O. found that the assessee had received a sum of 2

ITA No.157 /Vizag/2017 & CO 76/Vizag/2017 M/s. Coastal Automobiles Pvt. Ltd., Rajamahendravaram ` 3,07,87,416/- from various persons who have deducted the tax at

source but from the Profit &Loss account, it was observed that the

assessee had admitted the receipts from Reliance Industries Limited

and M/s. ONGC aggregating to ` 1,82,39,035/- and the balance amount

of ` 1,25,48,381/- was remained unadmitted. Therefore, the A.O. made

the addition of ` 1,25,48,381/- difference in turnover to the returned

income.

before the CIT(A) and the Ld. CIT(A) observed that as per the profit &

loss account, the assessee had offered the income of ` 536.30 lakhs

towards other income other than sale of vehicles. The receipts of `

182.4 lakhs relating to Reliance industries and ONGC forms part of other

income in the P&L account of ` 536.30 lacs and out of other income ,

the receipts subjected to TDS as per the TDS certificate was only a sum

of ` 307.87 lakhs. Therefore, the CIT(A) has viewed that the income

admitted by the assessee is more than the receipts subjected to TDS,

and hence there is no loss to the revenue on this account and

accordingly deleted the addition.

before us. During the appeal hearing, the Ld. D.R. argued that in this

ITA No.157 /Vizag/2017 & CO 76/Vizag/2017 M/s. Coastal Automobiles Pvt. Ltd., Rajamahendravaram case, the A.O. has given number of opportunities and called for the

details inspite of giving repeated opportunities the assessee failed to

furnish the details during the assessment proceedings. The A.O. called

for the relevant basic details but the assessee failed to furnish the same.

From plain reading of the assessment order, it is also clear that the

assessee has not produced books of accounts. In the absence of the

books of accounts and the required details, the A.O. completed the

assessment as per the information available on record by making the

addition of ` 1,25,48,381/- relating to the income shown under schedule

2 of the statement of income. Though Ld. CIT(A) held that the assessee

has admitted ` 536.30 lakhs in the profit & loss account representing

other than sales item wise receipts subjected to TDS, it was neither

examined by the CIT(A) nor the CIT(A) has called for the remand report.

Since the assessment is completed u/s 144 of the Act and the receipts

vis-à-vis TDS certificate were not reconciled by the assessee before the

A.O., Ld. A.R. requested to remit the matter back to the file of the A.O.

to consider the issue on merits.

and objected to remit the matter back to the file of the A.O.

ITA No.157 /Vizag/2017 & CO 76/Vizag/2017 M/s. Coastal Automobiles Pvt. Ltd., Rajamahendravaram 6. We have heard both the parties, perused the materials available

on record and gone through the orders of the authorities below. In this

case, it is evident from the assessment order that the A.O. has given

number of opportunities for completion of assessment but certain details

were not furnished by the assessee during the assessment proceedings.

The Ld. A.R. submitted reconciliation statement of receipts as per 26AS

and with respect to other income offered in the profit & loss account.

According to the reconciliation statement, the receipts as per 26AS was

` 3,07,87,467/-. Though the other income admitted in the return of

income other than sales was ` 5,36,26,699/-, the said reconciliation

statement was not made available to the A.O. and it appears from the

assessment order that assessee has not produced the books of accounts

for examination. The admission of receipts as per 26AS is required to

be verified from the books of accounts. The reconciliation statement as

well as the other income are required to be examined by the A.O. to

confirm whether the assessee has admitted the said receipts in the P&L

account or not. Therefore, we are of the considered opinion that the

issue needs to be remitted back to the file of the A.O. It appear from

the Ld. CIT(A)’s order that the CIT(A) has not given any opportunity to

the A.O. to verify the correctness of the reconciliation submitted by the

assessee. The Ld. CIT(A) also deleted the addition on the presumption

ITA No.157 /Vizag/2017 & CO 76/Vizag/2017 M/s. Coastal Automobiles Pvt. Ltd., Rajamahendravaram that total other receipts were ` 536.30 lakhs more than the income

which was subjected to tax and thus there was no loss of revenue. The

issue of difference in receipts compared to schedule-2 was neither

examined by CIT(A) with the relevant books of accounts nor remitted

matter back to the file of the A.O., hence, we are of the considered

opinion that in the interest of justice, the issue should be remitted back

to the file of the A.O. to verify the receipts as per 26AS and the income

offered by the assessee in the profit & loss account. Accordingly we set

aside the order of the CIT(A) and remit the matter back to the file of the

A.O. to decide the issue afresh on merits.

statistical purposes.

C.O. 76/Vizag/2017:

ld.CIT(A). The cross objection is filed with a delay of 64 days and the

assessee has not filed any condonation petition to condone the delay,

therefore, the cross objection filed by the assessee is dismissed.

ITA No.157 /Vizag/2017 & CO 76/Vizag/2017 M/s. Coastal Automobiles Pvt. Ltd., Rajamahendravaram 9. In the result, the appeal filed by the revenue is allowed for

statistical purposes and the cross objection filed by the assessee is

dismissed.

The above order was pronounced in the open court on 26th Apr’18.

Sd/- Sd/- (वी. दुगा�राव) ( ड.एस. . . . सु�दर "संह) (V. DURGA RAO) (D.S. SUNDER SINGH) �या�यक सद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER #वशाखापटणम /Visakhapatnam: 'दनांक /Dated : 26.04.2018 VG/SPS आदेश क� ��त)ल#प अ*े#षत/Copy of the order forwarded to:-

Sr. Private Secretary ITAT, VISAKHAPATNAM