PARTHASARATHY GOPINATHAN,CHENNAI vs. ITO NON CORPORATE WARD 8(3), CHENNAI

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ITA 1366/CHNY/2019Status: DisposedITAT Chennai01 August 2019AY 2015-164 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal decided to give the assessee one more opportunity to explain the difference between the invoice value and the admitted value of goods. The matter was remitted back to the Assessing Officer for re-examination.

What were the facts?

The assessee's appeal concerns the assessment year 2015-16. The Assessing Officer made an addition of ₹15,55,080/- due to a difference between the invoice value of imported goods and the value admitted in the Profit & Loss account, which the CIT(Appeals) confirmed.

What were the issues?

The key issue was the reconciliation of the difference between the invoice value of imported goods and the purchase value reported in the Profit & Loss account, especially when the assessee claimed stock obsolescence.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI S. JAYARAMAN

For Respondent: Dr. S. Pandian, JCIT
Hearing: 25.07.2019Pronounced: 01.08.2019

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

1.

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) -9, Chennai, dated 31.03.2019 and pertains to assessment year 2015-16.

2.

No one appeared for the assessee even though the appeal was adjourned on the basis of the letter of the assessee. Therefore, we heard the Ld. Departmental Representative and proceeded to dispose of the appeal on merit.

3.

Dr. S. Pandian, the Ld. Departmental Representative, submitted that the only issue arises for consideration is difference in invoice value and admitted value of goods imported. According to the Ld. D.R., the invoice value was ₹43,90,438/-. However, the assessee has admitted only ₹28,35,358/- in the Profit & Loss account. Moreover, the data available with the Assessing Officer shows the payment of customs duty to the extent of ₹11,94,206/- against which the assessee has not claimed any expenditure under the head “Customs Duty Paid” in the Profit & Loss account. According to the Ld. D.R., the assessee claimed before the Assessing Officer that they are dealing in industrial paints which would become obsolete within three months. Since the difference was not reconciled, according to the Ld. D.R., the Assessing Officer made addition of ₹15,55,080/- to the total income of the assessee. The CIT(Appeals) also confirmed the addition made by the Assessing Officer.

4.

We heard the Ld. D.R. and perused the relevant material available on record. The Assessing Officer made addition of ₹15,55,080/- due to difference in the invoice value as well as CBEC data and actual purchase value reported in the Profit & Loss account. The assessee claimed before the Assessing Officer reduction of purchases on account of obsolete stock and damages which was not demonstrated with necessary material evidence.

This Tribunal is of the considered opinion that giving one more opportunity to the assessee to explain how the difference occurred between invoice value and admitted value would promote the cause of justice. Giving one more opportunity to the assessee may not prejudice the interests of Revenue in any way. Therefore, orders of both the authorities below are set aside and the issue raised by the assessee with regard to difference in invoice value and purchase value reported in Profit & Loss account is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter and thereafter decide the issue afresh after considering reconciliation, if any, filed by the assessee, in accordance with law, after giving a reasonable opportunity to the assessee.

5.

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

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