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Income Tax Appellate Tribunal, “A” BENCH, PUNE
आयकर अपील�य अ�धकरण “ए” �यायपीठ पुणे म� । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE सु�ी सु�ी सुषमा सु�ी सु�ी सुषमा सुषमा चावला सुषमा चावला चावला, �याियक चावला �याियक �याियक सद�य �याियक सद�य सद�य, एवं सद�य एवं एवं �ी एवं �ी �ी अिनल �ी अिनल अिनल चतुव�दी अिनल चतुव�दी चतुव�दी, लेखा चतुव�दी लेखा लेखा सद�य लेखा सद�य सद�य, केकेकेके सम� सद�य सम� सम� सम� BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM आयकर अपील सं. / ITA No. 907/PUN/2016 �नधा�रण वष� / Assessment Year : 2007-08 M/s. S P M Tools, B. No. 7, Old Industrial Estate, Ichalkaranji. New Address : Plot No.2-8, Sector-A, Parvati Co. Op. Ind. Estate, Yadrav, Dist.- Kolhapur Pin-416 145 PAN: AAEFS8736K .......अपीलाथ� / Appellant बनाम / V/s.
The Addl. Commissioner of Income Tax, Ichalkaranji Range, Ichalkaranji. ……��यथ� / Respondent
Appellant by : Shri M.K. Kulkarni Respondent by : Shri Ajay Modi. सुनवाई क� तार�ख / घोषणा क� तार�ख / Date of Hearing : 16.05.2018 Date of Pronouncement : 24.05.2018 आदेश / ORDER PER SUSHMA CHOWLA, JM
The appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeal)-2, Kolhapur dated 02.03.2016 relating to assessment year 2007-08 against order passed under section 143(3) of the Income Tax Act, 1961 ( in short ‘the Act’).
2 ITA No. 907/PUN/2016 A.Y. 2007-08
The assessee has raised following grounds of appeal:
“1. On the facts and circumstances of the case and in law the Ld. CIT(A) was not justified in dismissing the appeal without giving proper opportunity of hearing to the assessee. The order of the Ld. CIT(A) be set aside. 2. On the facts and circumstances of the case and in law the Ld. CIT(A) was not justified in confirming the addition made by the A.O. who had made addition of the amount of differences in balances in assessee’s books and that of the creditors. The assessee had no control over the books of the creditors. The addition made by the A.O. and confirmed by the ld. CIT(A) be deleted. 3. The appellant craves to leave, add/amend or alter any of the above grounds of appeal.”
The issue raised in the present appeal is against the order of CIT(A) in
confirming addition on account of differences in balances in assessee’s books of
account and that of the creditors. The assessee had alleged that the said balances
were reconciled.
The Ld. AR for the assessee before us, at the outset pointed out that proper
opportunity was not granted by the Authorities below to reconcile the differences in
balances in books of account. He further pleaded that opportunity may be allowed
to the assessee to file reconciliation and issue be decided thereafter.
On the other hand, the Ld. DR for the Revenue placed reliance on the orders
of Authorities below.
We have heard the rival contentions and perused the record. Briefly stated in
the facts of the case, the assessee was engaged in manufacturing and sale of
special purpose machine, machine tools, machine spare parts and trading in
engineering and electrical goods. For the assessment year under consideration, the
assessee filed return of income declaring total income of Rs.3,60,12,280/-. The
assessee had effected total turnover of Rs.23,52,88,007/- on which a gross profit of
3 ITA No. 907/PUN/2016 A.Y. 2007-08
Rs.7,65,48,684/- was shown. To verify the genuineness of the sundry creditors, the
Assessing Officer sought information from various parties under section 133(6) of
the Act. In some cases, replies of assessee were received and verified. In respect of
M/s.Potdar Enterprises, the closing balances as on 31.03.2007 as per assessee’s
books of accounts was seen to be standing at Rs.1,90,680/- whereas the
confirmation received from the concerned party shows the same balance at
Rs.3,980/-. Thus, there appeared difference of Rs.1,86,700/-. Similarly, in respect of
M/s.Sree Engineers, the closing balance as on 31.03.2007 was shown at
Rs.38,11,140/- as against which the party had confirmed it to the tune of
Rs.36,01,917/- leaving a difference of Rs.2,09,493/-. The assessee was show
caused to reconcile the differences. In response, the assessee furnished its
submission which are reproduced in Para 6.1 at page 3 of the assessment order.
However, The Assessing Officer rejected the plea of the assessee and made
addition of Rs.2,33,352/- on account of non-reconciliation of credit balance of
Rs.2,37,332/- of M/s. Potdar Enterprises and Rs.2,09,493/- of M/s. Sree Engineers.
The CIT(A) has confirmed the additions made by the Assessing Officer
against which the assessee is in appeal before Tribunal.
The only plea raised by assessee before us is that the said balances were
reconcilable and opportunity may be allowed to the assessee to reconcile the same.
We find merit in the plea of assessee in this regard. Accordingly, we remit the issues
back to the file of Assessing Officer to afford reasonable opportunity of hearing to
the assessee. The assessee is also directed to furnish complete information before
Assessing Officer who shall decide the issue after considering the details furnished
by assessee in respect of reconciliation of balances to sundry creditors and in
accordance with law. Accordingly, grounds raised by assessee are allowed for
statistical purposes.
4 ITA No. 907/PUN/2016 A.Y. 2007-08
In the result, appeal of the assessee is partly allowed for statistical purposes.
Order pronounced on this 24th day of May, 2018.
Sd/- Sd/- (ANIL CHATURVEDI) (SUSHMA CHOWLA) लेखा सद�य/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER
पुणे / Pune; �दनांक / Dated : 24th May, 2018 SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :
अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT (Appeal)-2, Kolhapur. 4. The CIT-II, Kolhapur/ CIT ( Central), Pune. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “ए” ब�च, 5. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 6.
// True Copy // आदेशानुसार / BY ORDER,
�नजी स�चव /Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.