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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM
O R D E R
PER DR. A. L. SAINI, ACCOUNTANT MEMBER:
Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2013-14, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), Valsad [in short “the ld. CIT(A)”] in Appeal No. CIT(A)/VLS/198/16-17/1391, dated 03.10.2017, which in turn arises out of an order passed by the Assessing Officer (AO) under section 143(3) of the Income Tax Act, 1961 [hereinafter referred to as the “Act”], dated 31.03.2016.
Grievances raised by assessee are as follows: “(1) On the facts and in the circumstances of the case as well in law, the learned CIT (Appeals), Valsad has erred in confirming the order of the ITO, Ward 1, Navsari in making addition to the extent of Rs. 4,90,328/- on misleading, baseless, arbitrary and perverse observations and hence, liable to be quashed. (2) On the facts and in the circumstances of the case, both the lower authorities have failed to appreciate in the right perspectives the detailed explanations offered by the appellant through various submissions filed substantiated by cogent and authentic evidences and hence, such addition as alleged purchases out of books is otherwise, unwarranted of facts, bad in law and against unrebutted explanations, authentic, believable and acceptable evidences adduced by the appellant and hence, unjustified.
Assessment Year. 2013-14 Bio agriclinic & Agribusiness Centre (3) Your appellant further reserves its rights to add, alter, amend or modify any of the aforesaid grounds before or at the time of hearing of an appeal. It is therefore, respectfully submitted that taking into account various submissions written as well as oral made in the course of assessment proceedings/appeal proceedings before the CIT (Appeals) through the written submissions, the entire addition of Rs. 4,90,328/- be deleted in toto especially in view of the appellant's submissions dtd. 05-01-2016, 15-01-2016, 16-03-2016 and 20-09-2017 filed with the AO and CIT (Appeals), which form part of statement of facts along with various submissions to be filed before Hon'ble ITAT, Surat and the appeal of the appellant be allowed in full as prayed for.”
Succinct fact are that during the assessment proceeding the Assessing Officer noted that appellant had shown purchases of Rs.50,35,463/- from Shri Dipak G. Gagani whereas the inquiry u/s. 133(6) of the Act in the case of Dipak G. Gagani indicated that Shri Gagani had sold mangoes worth Rs.55,25,791/- to the appellant in the current Assessment Year. The Assessing Officer further noted that the books of account of Shri Gagani was also audited wherein the sales worth Rs.55,25,791/- was shown to the appellant. It was also brought out by the Assessing Officer that the purchases to the extent of Rs.4,90,328/- (Rs.55,25,791/- - Rs.50,35,463/-) were shown in the books of Mr. Gagani as cash sales which was not recorded in the books of account of the appellant. Therefore, Assessing Officer made addition to the tune of Rs.4,90,328/-.
On appeal, Ld. CIT(A) confirmed the action of Assessing Officer. The Ld. CIT(A) observed that neither in the assessment proceedings, nor in the appellate proceedings the appellant could file any reconciliation with regard to the said purchase.
Aggrieved, the assessee is in appeal before us. We have heard both the parties. We note that neither in the assessment proceedings nor in the appellate proceedings, the assessee could file any reconciliation with regard to the said purchases. Just because assessee’s books of assessments are audited, does not mean that assessee should not explain the patent error discovered by the Assessing Officer. Thus, we are of the view that one more opportunity should be provided to the assessee to explain the difference in purchases to the extent of Rs.4,90,328/-
Assessment Year. 2013-14 Bio agriclinic & Agribusiness Centre (R.55,25,791 – Rs.50,35,463). Therefore, we set aside the order of Ld. CIT(A) and remit this issue back to the file of Assessing Officer to examine the reconciliation statement of purchases. The assessee is also directed to file the reconciliation statement of purchases to explain the difference of purchases to the tune of Rs.4,90,328/-.
In the result, appeal of the assessee is allowed for statistical purposes.
Order is pronounced in the open court on 27/01/2022 by placing the result on the Notice Board as per Rule 34(5) of the Income Tax (Appellate Tribunal) Rule 1963.