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Income Tax Appellate Tribunal, “C-SMC”BENCH: KOLKATA
Before: Shri A. T. Varkey, JM ]
This appeal is preferred by the assessee against the order of Ld. CIT (A), 14, Kolkata dated 10-04-2019 for the assessment year 2014-15.
The grounds of appeal
raised by the assessee are as under:-
1. That on the facts and in the circumstances of the case, Ld. C.I.T. (A) has ignored the remand report of AO in respect of sale made MIS Ashoka Buildcon Ltd and dismissed the appeal relying on sale as per ITS data, which is unjustified and contrary to law ..
2. That Ld. C.I.T. (A) has not mentioned the reason for ignoring the remand report in his order, particularly when AO. has examined the sales figure from M/S Ashoka Buildcon Ltd by issuing notice to the said company u/s 133(6) of Income Tax Act, which is against the law and normal justice.
3. That Ld. C.LT. (A) during appeal proceedings has not called for any explanation for the discrepancies between the sales figure as per ITS & sale figure confirmed in the remand report. Moreover, neither during assessment stage nor during appeal stage, ITS data was made available to the appellant, which is unjustified and against the normal justice.
4. That on the facts and in the circumstances of the case, Ld. C.LT. (A) is wrong and unjustified in confirming the action of AO. who assessed the undisclosed income of the appellant firm of Rs 9,09,201/- in the assessment as suppressed sale, based on the ITS data.
5. That the appellant craves leave to add, alter, adduce or amend any ground or grounds on or before the date of hearing of the appeal.”
Rajpath Service Station, AY 2014-15 3. The main grievance of the assessee is that the ld. CIT(A) has erred in confirming the action of the AO, who assessed undisclosed of the assessee firm of Rs.9,09,201/- in the assessment as suppressed sales based on ITS data.
Brief facts of the case as noted by the AO are that during the year under consideration, it was seen from the ITS data that the assessee had made sales to M/s. Ashoka Buildcon Limited amounting to Rs. 8,74,00,957/-. The assessee was directed to produce the ledger of the above mentioned party. On perusal of the ledger copy, it was observed that the total sale as shown by the assessee was Rs. 8,64,91,756/-. So, a difference of Rs. 9,09,201/- was found. Hence, according to AO, the assessee has suppressed its sales by Rs. 9,09,201/- and since the assessee has already booked all the incidental expenses, the amount of Rs. 9,09,201/- was taken as ‘undisclosed profit’ of the assessee and added to the total income of the assessee. Aggrieved, the assessee preferred an appeal before the ld. CIT(A), who was pleased to confirm the same after reproducing the remand report of AO by observing as under:-
“The AO in the remand report had confirmed that the total transaction of Ashoka Buildcon Ltd. with the appellant was only Rs.86491756/- during the year. However, as per ITS data, the appellant had made total sales of Rs.8,74,00,957/-. The A/R of the appellant could not explain the discrepancies of Rs.9,09,201/- during appeal proceedings. Therefore, the addition amounting to Rs.9,09,201/- is confirmed. This ground of appeals fails and, therefore, is not allowed.”
5. I have heard the parties and perused the records. I note that the assessee is partnership firm, which is engaged in retail distributor of H.S.D & M.S Products from I.O.C. (Indian Oil Corporation Ltd) in the name and style M/s. Rajpath Service Station. I find that assessee’s accounts are audited and Tax Audit report (TAR) u/s. 44AB of the Act was duly filed. The assessee has declared total income of Rs. 8,23,830/-. The AO completed scrutiny assessment determining total income at Rs. 17,33,030/- by making addition of Rs. 9,09,201/- on account of alleged undisclosed profit on suppressed sales in connection with transaction of M/s. Ashoka Buildcon Limited. It is noted that based on the difference between M/s. Ashoka Buildcon Limited as per ITS details and as per leger of the appellant/assessee firm an amount of Rs. 9,09,201/- was added. When the AO confronted the assessee in respect of Rajpath Service Station, AY 2014-15 discrepancy/ difference of sale made to M/s. Ashoka Buildcon Limited in the light of the TDS details and as per ledger of the assessee firm, the assessee filed ledger copies of the assessee firm as per books of account and ledger copy of the assessee firm in respect of M/s. Ashoka Buildcon Limited. The difference between two ledger reconciliation is as under:-
Date as per Particulars Amount/Rs ledger (A) Total Credit (against Purchase Appellant 9,20,21,074/- Firm) as per Ledger of M/S Ashoka Bulldcon Ltd 01/04/2013 Less: Opening Balance (payable) carried forward 31.39,296/- from earlier year 8,81,51,778/- 01/04/2013 Less: Deposit wIth Rajpath Service Station 7,30,000/- 8,81,51,778/- 15/04/2013 Less: Cancellation of payment made on 4/04/13 16,59,034/- Total Purchase during Fin. Yr. 2013-14(A) 8,64,92,744/-
(B) Total Debit (against Sales to M/S, Ashoka 9,03,61,050/ Buildcon) as per Ledger of Appellant Firm - 01/04/2013 Less: Opening Balance (receivable) carried 38,69,294/- forward from earlier year
Total Sales during the Fin. Yr. 2013-14 (B) 8,64,91,756/- Difference CA) minus (B) 988/- It was explained with the help of the aforesaid reconciliation that the difference in total purchase from the assessee firm as per ledger of M/s. Ashoka Buildcon Ltd was only to the tune of Rs.988/- as against sales recorded by the assessee firm in its books of accounts. Thus, the prayer of assessee is that the addition on the score of undisclosed sales of Rs. 9,09,201/- needs to be deleted or in the alternative, the assessee had submitted that entire difference of Rs.9,09,201/- even if existing, cannot be added in its entirety and only profit element of the undisclosed sales could be added.
Rajpath Service Station, AY 2014-15 6. After hearing both the sides, it is noted that the assessee has reconciled the difference and the remaining difference is only to the tune of Rs.988/-. Since Ld. DR could not point out any mistake in the reconciliation made by the assessee (supra), I direct deletion of the addition of Rs.9,09,201/-.
In the result, the appeal of the assessee is allowed.
Order Pronounced in the Open Court on 20th December, 2019