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Facts
M/s Amit Industries, engaged in rice milling and wheat trading, was assessed for AY 2014-15, with the Assessing Officer determining income at Rs.18,25,185/- after making additions for Palledari expenses (Rs.4,91,115/-), commission (Rs.9,00,000/-), and other expenses (Rs.1,34,960/-). The CIT(A) partly allowed the appeal but directed the AO to verify the opening stock quantity as on 01.04.2013, which was mistakenly overstated by the assessee's advocate in prior submissions from 12,795.15 Quintals to 42,359.71 Quintals, impacting the Palledari expense disallowance.
Held
The Tribunal upheld the CIT(A)'s direction to the Assessing Officer to verify the correct opening stock quantity. It found this direction fair and reasonable given the assessee's own admission of a typographical error by their advocate. The Tribunal concluded that merely directing verification of the stock quantity caused no prejudice to the assessee, thereby sustaining the CIT(A)'s impugned appellate order.
Key Issues
Whether the CIT(A) erred in directing the Assessing Officer to verify the correct opening stock quantity as on 01/04/2013, which was mistakenly overstated by the assessee's advocate in prior submissions and consequently affected the disallowance of Palledari expenses.
Sections Cited
40(A)(2)(b), 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH ‘SMC’, LUCKNOW
Before: SHRI ANADEE NATH MISSHRA
2014-15 against impugned appellate order dated 06/08/2025 (DIN & Order No.ITBA/NFAC/S/250/2025- 26/1079346745(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short].
(B) In this case assessment order dated 17/11/2016 was passed by the Assessing Officer whereby the assessee’s total income was determined at Rs.18,25,185/- (rounded off to Rs.18,25,190/-) as against returned income Assessment Year:2014-15 3 The assessee’s appeal against the assessment order was disposed of by learned CIT(A) vide aforesaid impugned appellate order dated 06/08/2025 whereby the assessee’s appeal was partly allowed. (B.1) The present appeal has been filed by the assessee against the aforesaid impugned appellate order of the learned CIT(A). The grounds of appeal are as under:
“1. That the Ld. C.I.T. (A), NFAC erred on facts and in law in giving directions to Ld. A. 0. to verify the Claim of Appellant regarding Opening Stock being 42359.71 Quintals of Wheat, Rice, Rice Bran as Opening Stock without appreciating that Opening Stock was only 12795.15 Quintals and 29564.56 Quintals has been sold out of own manufactured Rice and Rice bran and wheat (after purchase) from 01.04.2013 to 30.09.2013.
That on total quantity, of 42359.71 Quintals, assessee paid Palledari Expenses of Rs.750382/- (The Ld AO mentioned in the order total claim of palledari exps as Rs.747018/-) up to 30.9.2013, which is approx. Rs. 18/- per Qtl. However, Ld. A. O. allowed Palledari Expenses of Rs.255903/- (@20/- per Qtl for sales of 12795.15 Quintals) out of total claim of Rs.750382/- (The Ld AO mentioned in the order total claim of palledari exps as Rs.747018/-) and disallowed Rs.491115/- without appreciating that 29564.56 Quintals was sold out of own manufactured rice and rice bran and wheat (after purchase).
That the relevant details being Tax Audit Report, Palledari Expenses, Sales and Purchases in terms of Quantity and Sale Value has been filed in Assessment proceeding as well as before Ld. C.I.T. (A). However, due to oversight by assessee's Advocate Mr. Murli Manohar Agarwal, he wrongly stated 42359.71 Quintals as Opening Stock in his submission which was unintentional. The Correct Quantity is also verifiable from the relevant details filed.
That directions given by Ld. C.I.T. (A), NFAC to Ld. A. O. of verifying 42359.71 Quintals as Opening Stock as on 01.04.2013 for deleting the addition of Rs. 491115/- is contrary to the facts and details on record and only on the basis of unintentional mistake of Advocate Mr. Murli Manohar Agarwal by wrongly stating in reply as 42359.71 Quintals Opening Stock.”
Assessment Year:2014-15 4 (B.2) In the course of appellate proceedings in Income Tax Appellate Tribunal, a paper book containing the following particulars was filed from the assessee’s side:
(B.3) The aforesaid paper book contained written submissions, which are reproduced below for the ease of reference:
Assessment Year:2014-15 8 (C) At the time of hearing, learned A.R. for the assessee placed reliance on the aforesaid written submissions (reproduced in foregoing paragraph B.3 of this order). Learned D.R. supported the order of learned CIT(A). The sole dispute in the present appeal is regarding the direction of the learned CIT(A), in the aforesaid impugned appellate order to the Assessing Officer to verify the claim of the appellant regarding quantity of opening stock, as on 01/04/2013. Although multiple grounds of appeal are taken by the Assessment Year:2014-15 9 appellant; they pertain to this core issue. Therefore, all the grounds of appeal are being disposed of together. By assessee’s own admission, the opening stock disclosed by the assessee was a result of inadvertent typographical mistake. When the assessee admits that there was a mistake in reporting of the quantity of the opening stock, the direction of the learned CIT(A) to the Assessing Officer to verify, is fair and reasonable in the facts and circumstances of the case. No prejudice is caused to the assessee merely by verification of quantity of opening stock, at the end of the Assessing Officer; and no interference is called for in the impugned order of the learned CIT(A) on this issue. Therefore, the impugned appellate order of the learned CIT(A) is sustained and the appeal of the assessee is dismissed.
(C.1) All the ground of appeal are treated as disposed of in accordance with the aforesaid order.
(D) In the result, the appeal of the assessee is dismissed.
(Order pronounced in the open court on 05/02/2026)