M/S. S. S. INTERNATIONAL,VERAVAL vs. THE PR. CIT-1, RAJKOT, RAJKOT

As transpires from order of the ld.Pr.CIT, the error noted by the ld.Pr.CIT in the order passed by the AO under section 143(3) of the Act was that he had considered the total exports of the assessee of frozen fish during the year as reflected in its P& L account of Rs.87,50,91,292/-, though ITS data of the assessee reflected the total invoice value of goods exported at Rs.87,79,91,536/-. As per the ld.Pr.CIT there was a difference of Rs.29,00,244/- in the export data as per ITS data and that reflected by the assessee in its books of accounts, and the AO having not examined the issue, and sought explanation from the assessee on this aspect, the order passed by theAO was an error causing prejudice to the Revenue.

Further perusal of the order of the ld.Pr.CIT reveals that on show causenotice being issued to the assessee under section263 of the Act, the assessee requested the ld.Pr.CIT to provide relevant ITS data so as to make submission inthis regard. The same was provided to the assessee, in response to which the assessee submitted that the details submitted in the data are inconsistent and not comparable with books of accounts and also the data was summary, with only one single entry and no break-up of the bills from which it was compiled. During the course of hearing before us, the ld.counsel for the assessee drew our attention to the submission made before the ld.Pr.CIT in this regard by the assessee, placed before us at page no.6 to 8 as under:

The ld.Pr.CIT, we have noted, went on to hold that CBEC report was very clear containing specific information and since the same was needed to be examined with the books of accounts,therefore, necessary directions in this regard were given to the AO to examine the same. The findings at para-5 of the order are as under: “5….. Assessee’s submission has been examined and it is noticed that there are number of fields given in the CBEC report summary data which are very clear containing specific information therefore assessee’s plea that the same are inconsistent does not appear to be correct. Since the same needs to be examined with the books of accounts therefore necessary direction in this regard are being given to the AO in subsequent paras of this order to examine the same. Since the AO has failed to examine the original assessment proceedings therefore the order passed by the AO is erroneous and prejudicial to the interest of revenue.”

He further goes to hold the assessee has failed to fileany reconciliation for difference of Rs.29 lakhs noted and the AO having not examined this issue, the assessment order was erroneous causing prejudice to the Revenue.

The ld.counsel for the assessee, besides drawing our attention to the letter submitted to the Ld.Pr.CIT stating that in the absence of specific information of the invoices raised by the assessee as per the ITS data, no reply could be filed by the assessee nor could any reconciliation be furnished of the exports as reflected in the ITS and as reflected in the books of accounts of the assessee. The ld.counsel for the assessee also drew our attention to the data which the assessee itself extracted from ICEGATE portal (Custom Department’s Portal). Screen-shots were produced before us at PB Page no.9 to 14. The ld.counsel for the assessee pointed out that the same revealed 198 entries while ITS data revealed 196 entries; he pointed out that there was no bill-wise detail provided either in the ITS data or data provided in the Custom’s Portal ICEGATE; that in the absence of any specification information, the assessee was not in a position to file any reconciliation whatsoever of the exports reflected in the custom data and that reflected in the books of the assessee.

The ld.DR at this juncture was asked as to what explanation/reconciliation was expected from the assessee, when no specific data of the bills raised by the assessee, as available in the ITS data or with the Custom Department, was available. The ld.DR was unable to give satisfactory reply.

Considering the same, we hold that the entire exercise of the ld.Pr.CIT in holding the assessment order as erroneous proceededon a premise which did not exist and was totally unjustified. In the absence of break up, bill wise, of the exports of the assessee reflected in the ITS data, any explanation or reconciliation of the difference in the said exports from that reflected in the Books of the assessee was virtually impossible. The ITS data ,giving no breakup of export sales, therefore, we hold, had not been rightly considered by the AO during assessment proceedings for seeking any explanation from the assessee for difference from the export sales reflected in the books of the assessee. This being the only information with the Ld.PCIT , we hold, that there was no error in the order of the AO for not seeking any explanation on account of the information in ITS data.

In the result, appeal of the assessee is allowed.