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2016 (5) TMI 1172

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..... nd generally, we find that there may be mistake in the monthly return and not in the annual return. Mere comparison with the monthly return is not sufficient, particularly when there is no rectification application filed before the sales tax authority, asking for rectification in annual return and asking for refund of excess sales tax paid on the basis of mistake in the annual return. Hence, we find that no merit in this contention that there is mistake in the annual return - Decided against assessee Addition of difference between the value of stocks falsely declared to Canara Bank as at 31-03-2004 and 31-03- 2005 - Held that:- We find that as per the Tribunal’s order in assessee’s own case for assessment year 2004-05 wherein it was held that closing stock as on 31-03-2004 should be considered as opening stock on 01-04-2004 relevant for the assessment year 2005-06. In the present year, the closing stock as per stock statement given to Canara Bank as on 31-03-2005 is ₹ 51.70 lakhs. The closing stock as per the stock statement submitted to Canara Bank as on 31-03-2004 was of ₹ 35,74,910/- and the AO made the addition of difference amount only of ₹ 15,95,091/-. T .....

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..... d if required, he may obtain remand report from the AO. In the present case, ld.CIT(A) has restored the matter to the file of the AO with some directions. The order of the ld. CITA) is not sustainable and therefore, we set aside his order on this issue and restore the matter back to his file for a fresh decision Validity of assessment - period of limitation - Held that:- We find that as per the provisions of sub-sec.2A of sec. 153 of the IT Act, 1961, the AO had to pass a consequential assessment order after setting aside of the matter to his file by the Tribunal as per its order u/s 254 of the IT Act. The present assessment order had been passed by the AO after passing of the order by the Tribunal u/s 254(2) of the IT Act as per which, the scope of the original Tribunal order was enlarged by the Tribunal and therefore, we find force in the submission of the ld. DR of the revenue that the period of limitation as provided in sub-sec.2A of sec.153 has to be considered from the receipt of this order in M.P. in the office of CIT and when this is done than it is clear that the present assessment order is not time barred because the same is passed before the expiry of one year from th .....

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..... igher figure of 1035.28 lakhs and the addition was made by the AO on the basis of this figure of CST sales in annual return. He submitted that since the figure as per monthly sales tax return is tallying with the books of accounts, no addition is justified. 3. Learned DR of the revenue supported the orders of the authorities below. 4. We have considered the rival submissions. We find that there is no dispute that the annual turnover of CST sales as per annual return filed before the sales tax authority is ₹ 1035.28 lakhs and the annual sale of CST sales as per books of account is only ₹ 1028.93 lakhs. The addition made by the AO is on account of higher turnover as per annual return filed with sales tax authority as compared to sales reported by the assessee in the P L account. Therefore, if it is found that the figure of CST sales as per annual return filed before the sales tax authorities is correct then, the addition made by the AO is justified. While examining the correctness of the figure of sales reported in annual return in form no.4 filed with CST authorities as available at pages 151 to 154 of paper book, it is seen that in the annual return, it is reporte .....

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..... . 5. Ground no.3 is a under; 3. That the Respondent Officer erred in adding a sum of ₹ 15,95,091/- to gross profit, the same being the difference between the value of stocks falsely declared to Canara Bank as at 31-03-2004 and 31-03- 2005 with complete disregard to the facts of the case and as such the impugned addition is liable to set aside . It was fairly conceded by the learned AR of the assessee that this issue is covered against the assessee by the Tribunal order in assessee s own case for the assessment year 2004-05 in ITA No.1234(B)/2001 dated 31-08-2012. He submitted a copy of the Tribunal order. In that year, the closing stock as on 31-03-2004 declared to the bank was ₹ 35,74,910/- but out of this, the Tribunal held that the closing stock of ₹ 19.25 lakhs is out of opening stock and to that extent, the addition was deleted and the balance addition of was confirmed on this basis that this much stock was purchased in that year out of undisclosed sources. It was submitted further that on the same basis, in the present year also, closing stock as on 31-03-2004 of ₹ 35,74,910/- will be considered as opening stock as on 01-04-2004 and theref .....

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..... se creditors to appear along with various details and in response, only three persons appeared and confirmed only part of the credits. The AO had given due credit for the amounts confirmed by them and treated the balance credit appearing in their names as not genuine. The addition in dispute as per this ground of ₹ 7.24 lakhs is in respect of these creditors. It is also noted by the learned CIT(A) that even in appeal, the assessee could not establish anything better. The assessee has filed confirmation of these three creditors by way of additional evidence on pages 338 to 340 of the paper book but this is not a case where confirmation was not available earlier. In fact, these three creditors filed confirmation before the AO also and they appeared before the AO and confirmed only part amount of the credits and the AO allowed the benefit to the extent of credit amount confirmed by these creditors. There is nothing brought on record before any of the authorities below or before us that why these parties confirmed only part of the amount of the credit when they appeared before the AO. Therefore, on the basis of these confirmation letter submitted before us as additional evidence, .....

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..... IT(A) had deleted the part of the amount of addition, whereas he should have deleted the entire amount of addition. 14. The learned DR of the revenue supported the AO s order. 15. We have considered the rival submissions. We find that regarding this issue, on page 4 5 of his order, it is stated by the ld.CIT(A) that it would be more appropriate to work out the peak of the credits to arrive at the unaccounted money deposited for the purpose of these transactions and directed the AO to work out these purchases and sales and make appropriate addition on this count. He has referred to the order of ld.CIT(A) for A.Y. 2004 05 wherein it was observed that opening stock as on 31-03-2003 is available for sale for depositing into OD account and on this basis, he directed the AO to keep this aspect also in consideration while working out the peak credit while giving due credit for the closing stock of earlier year which would naturally be available for deposit. In our considered opinion, the entire amount of closing stock of earlier year has been considered by the AO as opening stock of the present year and the additions was made by the AO to the extent of excess of closing stock of .....

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..... ding results based on a presumption that the addition on account of gross profit and closing stock difference amounts to double addition? Whereas the fact is that the closing stock difference is not explained and entire trading transaction was not accrued at all. 3. Whether the CIT(A) is right in deleting the addition made on account of bogs creditors in the light of the fact that the genuineness of the creditors could not be proved by the assessee. 4. Any other grounds that may be urged at the time of hearing . 18. The learned DR of the revenue supported the order of the AO whereas the learned AR of the assessee supported the order of the ld. CIT(A). 19. We have considered the rival submissions. We find that this issue has been decided by the ld.CIT(A) by making following observations at pages 4 5 of his order; However on the issue of deposits in the bank account, I find it is not a case where there were continuous deposits. As could be seen from the bank statements annexed to the assessment order there are periodical deposits and issue of cheques to various individuals. This appears to be a complete set of trading outside the books of accounts for which .....

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..... back to the file of ld.CIT(A) for fresh decision. Learned CIT(A) should decide the issue himself instead of restoring the matter to the file of the AO and for doing so, he may obtain remand report from the AO. Ld. CIT(A) should pass necessary order as paw, as per the above discussion, after providing adequate opportunity of hearing to both sides. Accordingly ground no.1 of the revenue is allowed for statistical purposes. 20. Regarding ground no.2 of the revenue, we find that this issue has been decided by the ld.CIT(A) by making following the observation on pages 15 16 of his order. The same are reproduced as under; In the statement of facts, it is argued that the difference between the alleged value of stock as at 31.3.2004 and 31.3.2005 has already been added and hence separate addition is not warranted. I have examined the issue carefully. As far as the closing stock is concerned, it is already covered in the recasting trading account and the addition mad is also confirmed. Now on the same losing stock making another addition on account of increase in asset would only be a double addition. Elsewhere in this order, based on the transactions in OD account the AO is dire .....

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..... Raju is available at page no.205 of paper book which shows opening balance of ₹ 2,17,272/- and fresh purchase of coffee from this party during this year of 2.25 lakhs resulting into closing balance of ₹ 4,42,272/-. The ledger account of second party M.K.Suveena, is available at page 207 at paper book as per which, it shows closing balance of ₹ 3,60,000/- from this party in the present year on account of purchases in the present year. Similarly, the ledger account of third party Shri K.M.Jayapakash is available at page 210 of paper book as per which there is fresh purchase of coffee during the present year of 5.30 lakhs. The ledger copy of 4th party Shri K.M.Lokanath is available at page 211 of paper book and in this ledger account also shows an amount of ₹ 5.22 lakhs on account of purchases in the present year. The ledger copy of 5th party Shri H.M.Sudheer is available at page 214of paper book and it shows fresh purchases of coffee of ₹ 2.20 lakhs. Hence, it is seen that the entire credit of ledger account of these parties is on account of fresh purchase of coffee during the present year except opening balance of ₹ 2,17,272/- in the account of on .....

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..... 24. The assessee has also raised additional grounds which are as under; 1. The impugned order of assessment made on 21-12-2011 by the ld. AO u/s 143(3) r.w.s. 254 is null and void and is liable to be annulled in sofar as the same is barred by limitation of time specified under subsection( 2A) of Sec.153 of the IT Act, 1961. 2. The ld. CIT(A) Mysore erred in upholding the impugned order of assessment made on 21-12-2011 by the ld.AO u/s 143(3) r.w.s.254 though, it is null and void and is liable to be annulled in sofar as it is barred by limitation of time specified under sub-sec.(2A) of Sec.153 of the IT Act, 1961 . 25. Ground no.4 was not pressed by the learned AR of the assesssee and regarding ground no.5, it was submitted that this is consequential. Accordingly, ground no.4 of the assessee is rejected as not pressed and ground no.5 is held to be consequential in nature. 26. Regarding ground no.1, 2 3, it was submitted by the ld. AR of the assessee that at pages 127 to 170 of the paper book is copy of URD purchase register for the period 01-04-2005 to 31-08-2005 seized by the ITO at the time of survey on 09-03-2007. It was also submitted that monthly abstr .....

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..... he order of the A.O. 28. We have considered the rival submissions. We find that this issue was decided by the ld.CIT(A) at para-4.10 of his order and the same is reproduced below for ready reference; 4.10 I have considered the rival contentions carefully. Even after Hon ble Tribunal set aside the matter to the file of the AO, the assessee could not produce any credible evidence in support of its argument that the purchases of Arabica are recorded as Robusta. If that is to be true, then, corresponding higher value payments should have been reflected in day book which is also not established. As seen from the purchase registers, there are detailed entries for each purchase and only one year end entry of reducing the purchase value without any basis. In the absence of any credible evidence, the entire effort of recasting accounts in only to bridge the gap with some assumption s which has no basis. Under these circumstances, I agree with the findings of the AO that the primary documents like purchase register or the actual evidences available in this case besides the returns for sale tax purpose etc., all the available evidences goes to prove that the recorded purchase are less .....

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..... nue that after passing of the Tribunal order on 26-06-2009 which is available on pages 95 to 303 of the paper book, the revenue moved a M.P. before the Tribunal and the Tribunal passed order in M.P.No.96(B)/2009 on dated 06-08-2010, copy of which is available on pages 304 to 305 of the paper book and therefore, the limitation period has to be considered from this date of M.P order and hence, the assessment order is not time barred, as per provisions of section 153 of I T Act. 30. We have considered the rival submissions. We find that as per the provisions of sub-sec.2A of sec. 153 of the IT Act, 1961, the AO had to pass a consequential assessment order after setting aside of the matter to his file by the Tribunal as per its order u/s 254 of the IT Act. The present assessment order had been passed by the AO after passing of the order by the Tribunal u/s 254(2) of the IT Act in MP No.96(B)/2009, as per which, the scope of the original Tribunal order was enlarged by the Tribunal and therefore, we find force in the submission of the ld. DR of the revenue that the period of limitation as provided in sub-sec.2A of sec.153 has to be considered from the receipt of this order in M.P. in .....

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