SOYABMAHMED VAHORA L/H OF LATE SHIRAJBHAI ABDULKARIMBHAI VAHORA,ANAND vs. THE INCOME TAX OFFICER, WARD-1, ANAND

The ground No.1 taken by the assessee is as under:- “1. That on facts, and in law, the learned AO has grievously erred in re- opening of assessment u/s 147 of the Act.” This ground has not been pressed. Hence, not required to be adjudicated.

The only effective ground taken up by the assessee in all the appeals is as under:- to 779/Ahd/2023 Soyabmahmed Vahora LH of late Shirajbhai A VahoraVs ITO Asst. Year : 2011-12 to 2013-14 - 2– “2. That on facts, and in law, the learned NFAC has grievously erred in confirming the addition of Rs. 11,97,683/- (AY 2011-12), Rs.7,88,175/- (AY 2012-13) & Rs.69,692/- (AY 2013-14) made by AO towards difference in contra ledger accounts of debtor M/s S Nasiruddin Biri Merchant Pvt. Ltd.”

The relevant facts as culled out from the records are as under:- 4.1 The Assessee was engaged in the business of tobacco selling and his product was only sold to M/s SK Nasiruddin Biri Merchant P. Ltd., Kolkata. During the assessment proceedings, it was noticed by the Assessing Officer that the assessee has shown a party named M/s SK Nasiruddin Biri Merchant P. Ltd., Kolkata as his sundry creditors in the balance sheet. During the relevant years, the Assessing Officer found discrepancy between the outstanding balance recorded in the assessee's books of accounts and the corresponding entries in the books of the debtor. As the assessee was unable to provide the ledger and confirmation from M/s SK Nasiruddin Biri Merchant P. Ltd., Kolkata, to substantiate the claim, the difference was added back to the assessee's total income vide order dated 29.11.2017 passed by the Assessing Officer u/s 143(3) r.w.s. 147 of the Act for the Assessment Years under consideration.

Aggrieved by the order of the Assessing Officer, the assessee has carried the matter in appeal before the ld. CIT(A) who dismissed the appeal of the assessee.

Aggrieved, the Assessee is now in appeal before the Tribunal.

During the hearing, it was submitted by the ld. Counsel that the assesse is doing business in tobacco merchant he sold his product only to M/s SK Nasiruddın Biri Merchant P. Ltd., Kolkata and during the year, the assesse make business transactions with their debtors as well as his to 779/Ahd/2023 Soyabmahmed Vahora LH of late Shirajbhai A VahoraVs ITO Asst. Year : 2011-12 to 2013-14 - 3– suppliers out of that there are some transaction were made under instructions of M/s SK N. Biri Merchant P. Ltd., Kolkata and some transactions directly doing by M/s SK N. Biri Merchant P. Ltd., Kolkata to several local suppliers but without reconcile of account each other there were cumulative difference of closing balance. 7.1 The ld. Counsel has taken through the reconciliation statement showing the reasons between the ledger of the assessee and the ledger of the debtor. The reasons are as under:- (A) Direct payment to Harikrishna Trading Co., Mahudha for Rs.4,36,268/- against assessee’s purchase of Gunny Bags as per assessee’s instruction letter dated 28.06.2010. (B) Direct payment to M/s Gordhanbhai Dadabhai, Anand for Rs. 7,88,175/- against assessee’s purchase of Gunny Bags as per assessee’s instruction letter dated 05.07.2011. (C) Direct payment to M/s Gordhanbhai Dadabhai, Anand for Rs.5,27,727/- against purchase of Gunny Bags as per assessee’s instruction letter dated 28.06.2010 (D) Amount of Bank Commission paid on behalf of assessee for above detailed Demand Draft and others payment to assessee’s suppliers for Rs. 8,688/- (E) Reimbursement of Travelling Expenses amounted to Rs.69,692/- (F) Traveling Expenses during the course of personal business visit to Kolkata, some payments directly made for travel and hotel accommodation as per their letter dated 15.11.2012. (G) Further, it is a fact on record that the assessee made following payments to M/s. Gordhanbhai Dadabhai, Anand:- to 779/Ahd/2023 Soyabmahmed Vahora LH of late Shirajbhai A VahoraVs ITO Asst. Year : 2011-12 to 2013-14 - 4– Date Ch. No. Amount (Rs.) 01/02/2011 073869 drawn on 1,00,000/- Union Bank of India. 04/03/2011 034628 drawn on 1.25,000/- Union Bank of India Total 2,25,000/- 7.2 It was submitted that the above amount wrongly debited to Ledger of M/s. SK N. Biri Merchant Pvt Ltd., Kolkata in assessee’s Books of A/c instead of M/s. Gordhanbhai Dadabhai, Anand and, after the reconciliation of the ledger a/c of both sides, the genuine difference between each other account is Rs. 30.90. 7.3 The ld. Counsel has also submitted the following:- A) Copy of Debit Note issued by M/s Nasirudding Biri Merchant Pvt. Ltd., Kolkata for Rs.4,36,268, Rs 5,27,727/- and Rs 8,688/-. B) Copy of Credit Note issued by Vahora Sirajbhai Haji Abdulkarimbhai, Anand for Rs. 2,25,000/- Dated 05.07.2011 C) Copy of information letter to M/s Nasirudding Biri Merchant Pvt. Ltd., Kolkata for Purchase for Rs. 4,36,268/- D) Copy of Ledger A/c of Shirajbhai A. Vahora in the Books of Accounts of (i) M/s Gordhanbhai Dadabhai, Anand for FY 2010-11 and (ii) M/s Nasirudding Biri Merchant Pvt. Ltd. Kolkata for FY 2010-11 which contained all missing bills/transactions for cross verification. F) Copy of assessee’s last two detailed submissions dated 27.09.2017 and dated 10.10.2017 made before the ld. CIT(A).

The ld. DR reiterated the arguments of the Assessing Officer which are as under:-