JAFFER ALI NASEEMA BEGUM,COIMBATORE vs. ITO, NCW-3(1), COIMBATORE

The assessee is an individual and distributor for products of Britannia Industries Ltd., Wrigley India Pvt. Ltd. and Reckitt Benkisser for an incentive at 4.5%. The assessee filed a return of income for AY 2014-15 on 11.11.2014 declaring total income of Rs. 4,26,580/-. The case was selected for scrutiny and the statutory notices were duly served on the assessee. The A.O noticed that the assessee has declared a very less profit as compared to the business turnover of the assessee. The A.O called on the assessee to furnish the details of sundry creditors, loan details, details of sundry debtors etc. after perusal of various detailed submitted by the assessee, the A.O concluded the assessment by making the following additions: 1. Difference in sundry creditors – Rs. 60,11,752/- 2. Undisclosed sundry debtors – Rs. 5,34,13,590/-

Aggrieved, the assessee filed further appeal before the CIT(A). The assessee before the CIT(A) submitted that the books of accounts furnished by the assessee during assessment proceedings was not returned and therefore, the assessee could not produce the reconciliation statement towards the addition made by the A.O. The CIT(A) after considering the submissions of the assessee dismissed the appeal by holding that: “9. I have considered the assessment order, submission of appellant and facts available on record. During the assessment proceedings, the A.O found discrepancies in the balances shown by the appellant in 3 parties namely Britannia Industries Ltd, Wrigley India Ltd and Reckitt Benkisser Pvt Ltd. The A.O noted that there is a difference of Rs 60,11,752 as per the balance sheet of appellant and as per the confirmations filed by these parties. The A.O further noted that the differences are due to non-accounting of credit notes and non- accounting of certain cheque payments. However, the appellant has neither furnished any explanation regarding these discrepancies nor furnished any reconciliation of these accounts. Therefore, the A.O made addition of Rs 60,11,752. In the written submission filed, the appellant has submitted that the books of accounts of appellant were lying with the department and hence the reconciliation of the same could not be furnished. It is seen that the appellant has not furnished any factual details and has not explained the issue in detail in spite of notice issued by this office in this regard. Therefore, I am not in a position to verify the same. Hence, I have no reason to differ with the decision of A.Ο. Accordingly, addition made by the A.O of Rs 60,11,752 is confirmed. 10. Regarding the addition made of Rs 5,34,13,590, the appellant has not furnished any explanation and factual details on this issue. It is only Jaffer Ali Naseema Begum :- 3 -: contended that in the initial notice, the A.O has proposed to make an addition of Rs 3,22,82,185 and the same was approved by the JCIT, Range-3, Coimbatore as per the directions issued u/s 144 of the Act. Thus, the A.O not followed the directions of JCIT. It is seen from the record that, the appellant vide letter dated 28.12.2016 had filed a petition before the concerned JCIT u/s 144 of the Act. Thereafter, the petition u/s 144 was disposed off by the JCIT with the direction to the appellant to appear in person and explain the case. As per the directions of JCIT u/s 144 of the Act, the A.O gave final opportunity and the case was fixed for hearing on 29.12.2016. The A.O also deputed Inspector to serve the letter to the appellant which was served on 27.12.2016. However, the appellant has not complied to this show- cause notice. This fact shows that the contention raised by the appellant that A.O has not followed directions issued by JCIT u/s 144A of the Act is factually incorrect. Further, the appellant has not furnished any details regarding discrepancies noted by the A.O of Rs 5,34,13,590 with respect to Roja Agencies either before the A.O or during the appeals proceedings. The A.O noted that the total payments made Roja Agencies is of Rs 6,67,70,810 whereas the receipt are shown of Rs 1,33,57,220. This difference amount of Rs 5,34,13,590 is not reflected in the books of account of the appellant. Further, the nature of transactions made with Roja Agencies are also not clear as the appellant has not furnished any explanation on the same. Therefore, I am unable to verify the issue further. Hence, I have no reason to differ with the addition made by the A.O of Rs 5,34,13,590. From the facts mentioned by the A.O it seems that the expenditure to the extent of Rs 5,34,13,590 is not reflected in the books of accounts and hence the same is to be treated as unexplained expenditure u/s 69C of the I.T Act. Accordingly, addition made of Rs 5,34,13,590 is confirmed. Appeal on these grounds is thus DISMISSED.”