GANGADHAR AGARWAL,NIZAMABAD V. ITO., WARD-1, NIZAMABAD

SA 18/HYD/2025

AI Insights

The case involves Gangadhar Agarwal, the appellant, contesting an addition made by the Assessing Officer (AO) regarding discrepancies in the opening and closing stock of various products for the assessment year 2017-18. The AO's additions were based on perceived discrepancies which the appellant argued were due to misunderstandings or misinterpretations of the stock details provided. The appellant sought a stay on the recovery of the outstanding tax demand and an early hearing of the appeal. The Departmental Representative (DR) opposed the stay, arguing that the AO had used the details provided by the appellant. The Tribunal found the issue to be factual, requiring detailed analysis, and thus granted an early hearing but did not grant the stay.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633686 (ITAT-HYDERABAD)
• Appeal Type: Stay Application
• Pronouncement Date: 13-06-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2017-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GURUPREET SINGH
• Assessee Lawyers: P. MURALI MOHAN RAO
• Keywords: Application of stay
• Section: 2

Judgement Text

" आयकर अपीलीय अधिकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A’ Bench, Hyderabad Before Shri Vijay Pal Rao, Vice President and Shri Manjunatha G., Accountant Member SA No.18/Hyd/2025 (Arising out of ITA No.697/Hyd/2025) (निर्धारण वर्ा/Assessment Year: 2017-18) Gangadhar Agarwal Nizamabad [PAN :AAYPA1643D] Vs. ITO Ward-1 Nizamabad (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri P.Murali Mohan Rao, AR रधजस् व द्वधरध/Revenue by: Shri Gurupreet Singh, DR सुिवधई की तधरीख/Date of Hearing: 13/06/2025 घोर्णध की तधरीख/ Date of Pronouncement: 13/06/2025 आदेश / ORDER PER VIJAY PAL RAO, VICE PRESIDENT: By way of this application, the assessee is seeking stay against the recovery of the outstanding demand of Rs.5,40,37,759/-. The Ld.AR of the assessee submitted that the Assessing Officer (“ the AO”) has made addition on account of discrepancies in the opening and closing stock of various products. He has pointed out that the AO has misunderstood the details of the opening stock, purchases, sales and closing stock 2 SA No.18/Hyd/2025 Gangadhar Agarwal furnished by the assessee and consequently made the addition based on incorrect assumption of facts. He has further submitted that even before the CIT(A), the assessee filed full details of the opening stock, purchases, sales and closing stock of various products, which were sent for the remand report of the AO, however, the AO again could not appreciate the correct facts and consequently, the addition made by the AO was sustained by the Ld.CIT(A). He has referred to the voluminous paper books containing the relevant details and documents, which were produced before the authorities below and submitted that the addition made by the AO is not justified and the assessee is having a good case on merits. Alternatively, the Ld.AR has submitted that the appeal of the assessee is listed for hearing on 10.07.2025, which may be preponed by granting early hearing of the appeal in the month of June itself. 2. On the other hand, the Ld.DR has vehemently opposed to the stay of recovery of outstanding tax demand and submitted that the AO has made the addition by considering the details furnished by the assessee himself. 3. We have considered the rival submissions and carefully perused the orders of the authorities below. The AO has made the additions on account of discrepancies in the closing stock of various products after considering details of opening balance, purchases, sales of as many as 15 products. The assessee has pointed out that the AO has considered the incomplete facts and 3 SA No.18/Hyd/2025 Gangadhar Agarwal rather wrong facts while arriving at the conclusion that there were discrepancies in the closing stocks of various products. The Ld.AR has referred to the documents produced before the authorities below to point out that the AO has misunderstood the nature of details regarding the opening stock, purchases, sales and closing stock. It is submitted that in the most of the cases, the AO has even ignored the opening stock and purchases and therefore came to the conclusion about the unexplained purchases, by taking only the closing stock. We find that the issue involved in the appeal of the assessee is purely factual in nature, which requires a detailed analysis and verification of the facts regarding the opening stock, purchases, sales and closing stock of various products. Therefore in the proceedings in question at the stage of hearing of the stay application, no observation or view can be formed without detailed examination and analysis of relevant facts, which requires a proper hearing of the matter. Accordingly, in the facts and circumstances of the case, we accept the request of the assessee for grant of early hearing of the appeal and consequently, the hearing of the appeal is preponed from 10.07.2025 to 24.06.2025. Hence, we decline to grant stay against recovery of the outstanding demand. However, the AO is directed not to take any coercive action for recovery of the outstanding demand till the next date of hearing i.e. 24.06.2025. Since the next date of hearing is announced in the open court and noted by both the parties, therefore, no separate notice be issued in this aspect. 4 SA No.18/Hyd/2025 Gangadhar Agarwal 4. In the result, stay is rejected and early hearing is granted. Order pronounced in the Open Court on conclusion of hearing on 13th June 2025. Sd/- Sd/- (MANJUNATHA G.) ACCOUNTANT MEMBER (VIJAY PAL RAO) VICE PRESIDENT Hyderabad, Dated 13th June 2025 L.Rama, SPS Copy to: S.No Addresses 1 Shri Gundu Agarwal, C/o P.Murali & Co., Chartered Accountants, 6-3-655/2/3, Somajiguda, Hyderabad 2 The Income Tax Officer, Ward-1, Nizamabad 4 The Pr.Commissioner of Income Tax, Hyderabad 4 The DR, ITAT Hyderabad Benches 5 Guard File By Order "