M/S. BIO AGRICLINIC & AGRIBUSINESS CENTRE,NA

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.

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/-

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