MEENA SAKARIYA,CHENNAI vs. ACIT, CHENNAI

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ITA 457/CHNY/2017Status: DisposedITAT Chennai12 October 2017AY 2010-115 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that it was unclear whether the difference pertained to sales or purchases. Therefore, the issue required fresh verification by the Assessing Officer to ascertain the nature of the difference and its reconciliation.

What were the facts?

During a survey, a difference of Rs. 3,78,456/- was found between the sales shown in the assessee's trading account and a reconciliation statement. The Assessing Officer treated this difference as unaccounted sales and made an addition.

What were the issues?

Whether the difference found during the survey pertained to sales or purchases, and if it was reconciled by the assessee.

Which sections of the Income-tax Act were involved?

Section 133A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘ B’ BENCH : CHENNAI

Before: SHRI ABRAHAM P.GEORGE & SHRI GEORGE MATHAN

आदेश / O R D E R

PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER:

1.

In this appeal filed by the assessee, which is directed against an order dated 15.12.2016 of the ld. Commissioner of Income Tax (Appeals)-5, Chennai, is aggrieved on an addition of Rs.3,78,456/-

ITA No. 457/Mds/2017 :- 2 -: made by the ld. Assessing Officer, which was confirmed by the ld. Commissioner of Income Tax (Appeals).

2.

Facts apropos are that assessee engaged in the business of finance and trading in steel pipes had filed her return of income for the impugned assessment year declaring an income of Rs.1,12,24,800/-.

There was a survey operation u/s. 133A of the Income Tax Act, 1961 (in short ‘’the Act’’) conducted in the premises of the assessee on 24.03.2010. As per the ld. Assessing Officer there were certain differences in sales and purchases found during the course of such survey. According to the ld. Assessing Officer, in the Trading Account prepared on the date of survey, the total sales shown by the assessee was Rs.30,46,71,196/- against which assessee had in a reconciliation filed, given a figure of Rs.30,50,49,652/-. According to him, there was a difference of Rs.3,78,456/- which was considered as unaccounted sales. An addition of �3,78,456/- was made.

3.

Aggrieved, assessee moved in appeal before the ld. Commissioner of Income Tax (Appeals). Claim of the assessee before the ld. Commissioner of Income Tax (Appeals) was that figures mentioned by the ld. Assessing Officer did not relate to sales.

ITA No. 457/Mds/2017 :- 3 -:

According to him, the sales figure submitted by the assessee at Rs. 30,50,49,652/- was more than figure of Rs.30,46,71,196/- found on the date of survey. Contention of the assessee was that there was no scope for addition on suppression of sales since figure submitted by the assessee in reconciliation was higher. As per the assessee, the difference of Rs. 3,78,456/- related to purchases. Assessee also gave a list of purchase bills, reconciling such difference. Ld. Commissioner of Income Tax (Appeals) sought a remand report from the ld. Assessing Officer. In the said remand report ld. Assessing Officer stated has under:-

‘’1. In the assessment order the difference of sales on the day of survey was �30,46,71,196/- as per trading accounting. However, a reconciliation provided shows sales at �30,49,652/-.

2. In view of the above, the disallowance made maybe sustained’’.

When this was put to the assessee, contention of the assessee was that ld. Assessing Officer had not dealt with its submissions at all.

Ld. Commissioner of Income Tax (Appeals) after considering 4. the remand report and the contentions of the assessee held that the difference added by the ld. Assessing Officer pertained to sales whereas assessee was giving the reconciliation for its purchases. He thus confirmed the addition made by the ld. Assessing Officer.

ITA No. 457/Mds/2017 :- 4 -:

Now before us, ld. Authorised Representative submitted that 5. ld. Assessing Officer as well as ld. Commissioner of Income Tax (Appeals) had failed to appreciate that difference was on account of purchases and not on account of sales. According to him, assessee had given billwise reconciliation of purchases and there was no scope for any addition.

6.

Per contra, ld. Departmental Representative strongly supported the orders of the authorities below.

7.

We have considered the rival contentions and perused the orders of the authorities below. Ld. Assessing Officer had considered sales as on the date of survey reflected in Trading Account of the assessee at �30,46,71,196/-. Assessee had submitted a reconciliation for the sales which as per the ld. Assessing Officer reflected a sum of �30,50,49,652/-. Contention of the assessee before the ld. Commissioner of Income Tax (Appeals) was that the difference of �3,78,456/- was on account of purchase, which stood reconciled and not on account of sales. In our opinion, the question whether the difference was on account of sales or purchases cannot be clearly discerned from available records. The question can be resolved only after verifying the books of accounts and other relevant documents relating to purchase and sales. We are of the opinion that the issue

ITA No. 457/Mds/2017 :- 5 -: requires a fresh look by the ld. Assessing Officer for ascertaining whether the difference was on account of sales or on purchases and whether it stood reconciled. Therefore, we set aside the orders of the lower authorities and remit the issue back to the file of the ld. Assessing Officer for consideration afresh.

In the result, the appeal of the assessee is allowed for 8. statistical purposes.

Order pronounced on Thursday, the 12thday of October, 2017, at Chennai.

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