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2015 (4) TMI 582 - ITAT HYDERABAD

2015 (4) TMI 582 - ITAT HYDERABAD - TMI - Addition due to difference in turnover reported in books of accounts and in VAT returns - Non taxable purchases reported in the taxable category of purchases in books of account - Held that:- We have heard the ld Counsel for the assessee wherein he has submitted that there was a mistake committed by the CTO which has been proved by the production of monthly statements filed before the said authorities. The ld Counsel for the assessee further pointed out .....

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herein he has held that the fact of the miss-match and the turnover in the certificate dated 23.11.2011 support the view that the figure reflected in the certificate dated 16.6.2011 is the correct figure.

Further, we find that the total purchases as reflected in the VAT return and as reflected in the schedule to the P&L a/c is the same and hence we confirm the order of the CI ,T (A) and dismiss the grounds raised by the Department on this issue.- Decided against the revenue. - ITA No. .....

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vegetable refined oil with a gross total income of ₹ 9,66,180/-. AO completed the assessment and assessed the income of the assessee at ₹ 1,53,92,693. Aggrieved, assessee filed appeal before the CIT (A). 3. With respect to addition of ₹ 16,13,275 on account of difference in sales as reported to the Commercial Tax Officer and as recorded in the books of accounts, AO compared the figures of sales as per VAT returns and Trading account in the books of the assessee on the one hand .....

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was an error for the month of December in the certificate dated 23.11.2011. The assessee relied on a certificate dated 16.6.2011. The turnover for December, 2008 was ₹ 10,03,68,648 whereas as per the certificate dated 23.11.2011, the turnover was ₹ 10,19,71,512 (i.e. a difference of ₹ 16,13,275/-). Since there was a difference between the two letters viz., 16.06.2011 & 23.11.2011, AO did not accept the letter dated 23.11.2011 obtained by the assessee and added the sum of &# .....

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have been ₹ 40,78,860 whereas if the turnover is accepted to be ₹ 10,03,68,648, the tax payable recorded in the statement is correct. 6. The ld CIT (A) held as follows: 4.3 I have considered the facts on record. There is very clearly a discrepancy between the certificates dated 16.06.2011 and dated 23.11.2011, both issued by the CTO Jadcherla. The proper course for the AO would have been to refer the matter to the CTO for verification. Though this has not been done, I find that reco .....

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ell as the certificate dated 16.6.2011 and the fact of the mismatch between the turnover and the tax payable in the certificate dated 23.11.2011 lends support to the view that the figure reflected in the certificate dated 16.6.2011 is the correct figure. The addition of ₹ 16,13,275 is therefore, directed to be deleted . 7. The Revenue has filed Ground Nos. 2 & 3 as follows: 2. The ld CIT (A) has erred in completely ignoring the information provided by the CTO Jadcherla vide letter date .....

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uld be to refer the matter to the CTO for verification and hence the same should be sent back to the AO directing him to verify the same. 9. We have heard the ld Counsel for the assessee wherein he has submitted that there was a mistake committed by the CTO which has been proved by the production of monthly statements filed before the said authorities. The ld Counsel for the assessee further pointed out in the statement relied on by the AO, the tax shall be taken at ₹ 40,14,746. Such tax i .....

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23.11.2011 support the view that the figure reflected in the certificate dated 16.6.2011 is the correct figure. This ground of appeal is decided against the Revenue. 10. Ground Nos. 4 & 5 raised by the Revenue are as follows: 4. The ld CIT (A) has erred in holding that the variation in purchases is only on account of non taxable purchases being reported in the category of taxable purchases in the schedule to the P&L a/c. 5. The ld CIT (A) has erred in holding that the total purchases ref .....

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50,15,042 34,36,95,803 81,87,97,740* *including unloading charges of ₹ 86,895 On the other hand, the assessee had recorded the following purchases of oil under the head raw material in the schedules to the P&L a/c. 1 Crude Rice bran oil (AP VAT) purchase a/c Rs.7,50,05,246 2 Crude Sunflower Oil (AP VAT) Purchase a/c Rs.36,96,03,148 3 Crude Ground Nut oil (AP VAT) Purchase a/c Rs.3,04,93,543 4 Crude Sunflower Oil (CST) Purchase a/c Rs.96,72,803 5 Crude Palmoline Oil (Import) Purchase a/ .....

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site vouchers and evidences and the AO had also not found any evidence to the contrary. The AR also submitted that the total purchases, including both taxable and exempt purchase, as per the books tallied with the figures in the VAT returns. 14. The CIT (A) examined the facts as stated in the assessment order and as submitted by the AR. 15. The CIT (A) held as follows: The total purchases (including both taxable and exempt purchases) is identically reported in the schedule to the P&L a/c and .....

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so long as the purchase is genuine. What is crucial in this case is that the total purchases as reflected in the VAT return and as reflected in the schedule to the P&L a/c is the same. Hence, the addition is directed to be deleted and the ground of appeal was allowed . 16. AO observed that there is a difference between the figures shown in the VAT returns against the purchases and the purchases as recorded in the final accounts. The total purchases of the raw material according to the assess .....

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here is a difference of ₹ 97,59,696 in the exempted raw material purchases and therefore, arrived at such an addition in the assessment order. 17. It was submitted that such an addition is not justifiable as the total purchases according the assessee and according to the AO is the same. In the circumstances, no addition should have been made by the AO. 18. The ld Counsel for the assessee further explained the difference as arrived at by the AO as follows: It can be seen at pages 3 and 4 th .....

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