M/S. EMBEE HEALTHCARE PVT. LTD.,NEW DELHI vs. ITO, NEW DELHI

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ITA 5250/DEL/2016Status: DisposedITAT Delhi30 November 2016AY 2013-143 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the chart detailing the purchase returns was not available to the lower authorities. Therefore, the matter was set aside to the AO for fresh adjudication after verifying the assessee's claim that the returns were already accounted for.

What were the facts?

The assessee claimed purchases of Rs. 5,60,085/- from a party, but did not reduce the amount by Rs. 1,66,309/- representing sales returns. The AO made an addition for this amount, which was confirmed by the CIT(A).

What were the issues?

Whether the AO was justified in adding back the sales returns when the assessee claimed they were already accounted for in the books of account.

Which sections of the Income-tax Act were involved?

Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC-I’, NEW DELHI

Before: Sh. N. K. Saini

Hearing: 29.11.2016Pronounced: 30.11.2016

ORDER This is an appeal by the assessee against the order dated 14.03.2016 of ld. CIT(A)-37, New Delhi.

2.

The only effective ground raised

1.

in this appeal reads as under: “That on the fact and in the circumstances of the case CIT(Appeals)-37, New Delhi was not justified in confirming the purchase return of Rs.166309/- as shown in the party (M/s Accurex Biomedicals Pvt. Ltd.) that was added in total income by the ld. ITO ignoring the checking of return advice etc.”

3. Facts of the case in brief are that the assessee filed the return of income on 27.09.2013 declaring an income of Rs.6,65,591/-. Subsequently, the case was selected for scrutiny. During the course of assessment proceedings, the AO in order to verify the purchases/sales 2 Embee healthcare Pvt. Ltd. issued notices u/s 133(6) of the Income Tax Act, 1961 (hereinafter referred to as the Act) to the various parties which remained uncomplied with. The AO noticed that the assessee had made purchases of Rs.5,60,085/- from M/s Accurex Biomedicals Pvt. Ltd. who furnished copy of ledger account which reflected sales return amounting to Rs.1,66,309/-. According to the AO, the assessee had not reduced the purchases returned in respect of this party. He, therefore, made the addition of Rs.1,66,309/-.

4.

Being aggrieved the assessee carried the matter to the ld. CIT(A) and furnished the details of credit note and challans of sales returned. However, the ld. CIT(A) held that the said addition had been validity made by the AO and sustained the addition.

5.

Now the assessee is in appeal. The ld. Counsel for the assessee furnished a chart in respect of purchase returned, credit notes and the entries made in the books of account and submitted that neither the AO nor the ld. CIT(A) appreciated the fact in right perspective. Therefore, no addition was called for, particularly when the assessee had already accounted for the purchases returned in its books of account.

6.

In his rival submissions the ld. DR supported the order of the authorities below.

3 Embee healthcare Pvt. Ltd.

7.

I have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it appears that the chart now furnished by the assessee was not available to the AO or the ld. CIT(A) for their consideration. At the same time, the claim of the assessee that the purchases returned had already been accounted for in the books of account needs verification at the level of the AO. Therefore, to meet the ends of justice, this issue is set aside to the file of the AO to be decided afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee.

8.

In the result, appeal of the assessee is allowed for statistical purposes. (Order Pronounced in the Court on 30/11/2016)

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