Amarchand Devarajji, Tenali V. Income Tax Officer, Ward-1, Tenali

ITA 183/VIZ/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1162 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 11-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SONOWAL
• Section: 143(3); 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOU - NTANT MEMBER . / I . T .A.NO. 183 /VIZ/ 201 8 ( / ASSESSMENT YEAR: 20 13 - 20 14 ) AMARCHAND DEVARAJJI PROP.SHAH AMACHAND & CO., D.NO.22 - 11 - 59B T.B.ROAD TENALI [PAN :A BLPD1646H ] VS. INCOME TAX OFFICER WARD - 1 TENALI ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI G.V.N.HARI, AR / RESPONDENT BY : SHRI D.K.SONOWAL, CIT DR / DATE OF HEARING : 15 . 11. 2018 / DATE OF PRONOUNCEMENT : 30 . 11 .2018 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE PR. COMMISSIONER OF INCOME TAX ( PR. CIT), GUNTUR DATED 31 . 01 .201 8 FOR THE ASSESSMENT YEAR 20 13 - 14 . 2 I.T.A. NO . 183 /VIZ/201 8 SRI AMARCHAND DEVARAJJI , TENALI 2. IN THIS CASE, THE ASSESSEE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.12,92,240/ - . THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED ON TOTAL INCOME OF RS.16,3 2,380/ - . SUBSEQUENTLY, THE LD.PR.CIT, GUNTUR HAS CALLED FOR THE RECORDS AND HAS TAKEN UP THE CASE FOR REVISION AND FOUND THAT THE ASSESSEE HAS OVER STATED THE PURCHASES COMPARED TO THE VAT RETURNS. ACCORDING TO THE VAT RETURN, THE TOTAL PURCHASES WERE R S.1015,34,67,656/ - AGAINST WHICH THE PURCHASES DEBITED TO THE PROFIT AND LOSS ACCOUNT WAS RS.1015,39,00,057/ - RESULTING IN EXCESS CLAIM OF EXPENDITURE UNDER THE PURCHASES TO THE EXTENT OF RS.4,32,401/ - . THEREFORE, VIEWED THAT THE ASSESSMENT MADE U/S 143 (3) WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND ACCORDINGLY ISSUED THE NOTICE U/S 263 CALLING FOR THE EXPLANATION OF THE ASSESSEE. 3. IN RESPONSE TO THE NOTICE ISSUED BY THE PR.CIT, THE ASSESSEE FILED EXPLANATION STATING THAT THE AC TUAL DIFFERENCE WAS RS.6,21,467/ - AS AGAINST THE DIFFERENCE WORKED OUT BY THE LD.PR.CIT AT RS.4,32,401/ - AS UNDER: SALES: 1) AS PER THE BOOKS OF ACCOUNT - RS.1015,40,89,153/ - 2) AS PER VAT RETURNS - RS.1015,34,67,656/ - ----------------------- DIFFERENCE - RS. 6,21,467/ - 3 I.T.A. NO . 183 /VIZ/201 8 SRI AMARCHAND DEVARAJJI , TENALI 4 . THE ASSESSEE ALSO FILED RECONCILIATION STATEMENT BEFORE THE LD.PR.CIT FOR THE DIFFERENCE AND EXPLAINED THAT THERE WAS A MISTAKE CREPT IN THE VAT RETURNS DUE TO CLERICAL ERROR. THE EXPLANATION OF THE ASSESSEE WA S AS UNDER: T HE DIFFERENCE IN VAT RETURNS IS DUE TO CLERICAL ERROR AND THE ACTUAL PURCHASES ARE AS PER PURCHASE INVOICES RECORDED IN THE BOOKS OF ACCOUNT WHICH WERE AUDITED U/S 44AB OF I.T.ACT. WE HAVE DISCUSSED AND EXPLAINED THE DIFFERENCE OF RS.6,21,467/ - IN VAT RETURNS TO THE COMMERCIAL TAX OFFICER AND THE LEARNED INCOME TAX OFFICER . RECONCILIATION STATEMENT OF PURCHASES FOR FEBRUARY 2013 & MARCH 2013 PURCHASES IN FEBRUARY AS PER BOOKS OF ACCOUNT T: 87,71,54,456 PURCHASES AS REPORTED IN VAT RETURN (2/3) : 87,87,00,022 (+) 15,45,566 EXCESS REPORTING DUE TO CLERICAL ERROR AND ACCEPTED BY CTO DURING INSPECTION AND AUDIT ON 21.08.2014 PURCHASES IN MARC H AS PER BOOKS OF ACCOUNT : 70,91,43,039 PURCHASES AS REPORTED IN VAT RETURN (3/3) : 70,69,76,006 ( - ) 21,67,033 OMISSION TO REPORT THE INVOICE NO.1042 DATED 28.03.2013 OF CHANDRA ANJAIAH PARAMESHWAR, SECBAD -------------------- UNDER REPORTING DUE TO CLERICAL ERRORS AND OMISSION RS. ( - ) 6,21,467 THE ASSESSEE FURTHER SUBMITTED THAT ALL THE PURCHASES ARE ACCOUNTED IN THE BOOKS OF ACCOUNTS , PRODUCED THE VOUCHERS AND THE AO VERIFIED THE RECONCILIATION STATEMENT AS WELL AS THE PURCHASES, THEREFORE ARGUED THAT THERE WAS NO ERROR IN THE ASSESSMENT ORDER WHICH REQUIRED TO BE MODIFIED OR REVISED. THE LD.PR.CIT CONSIDERED THE EXPLANATION OFFERED BY THE ASSESSEE AND OBSERVED THAT AS PER THE E - RETURNS, THE DIFFERENCE WAS ONLY RS.4,32,401/ - , WHEREAS THE DIFFERENCE WORKED OUT BY THE ASSESSEE WAS AT RS.6,21,467/ - WHICH INCLUDES THE OTHER MAKING CHARGES OF SILVER ARTICLES ETC. OF RS.1,89,060/ - . THEREFORE, THE LD.PR.CIT DID NOT BEL IEVE THE CONTENTION 4 I.T.A. NO . 183 /VIZ/201 8 SRI AMARCHAND DEVARAJJI , TENALI OF THE ASSESSEE THAT IT WAS CLERICAL MISTAKE . . THUS T HE LD.PR.CIT VIEWED THAT THE AO HAS MISSED THE ISSUE OF EXCESS PURCHASE OF RS.4,32,401/ - DEBITED TO THE PROFIT & LOSS A/C WHILE MAKING THE ASSESSMENT U/S 143(3) AND A CCORDINGLY , HELD THAT THE ASSESSMENT WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND DIRECTED THE AO TO REDO THE ASSESSMENT ON THE LINES INDICATED IN THE REVISION AL ORDER. 5 . AGGRIEVED BY THE ORDER OF THE LD.PR.CIT THE ASSESSEE IS IN APPEAL BEFORE US. DURING THE APPEAL HEARING, THE LD.AR SUBMITTED THAT THERE WAS A MISTAKE IN THE VAT RETURNS DUE TO CLERICAL ERROR TO THE EXTENT OF RS.6,21,467/ - WHICH WAS EXPLAINED TO VAT AUTHORIT IES. AFTER VERIFICATION OF THE DETAILS THE VAT AUTHORITIES HAVE ACCEPTED THE MISTAKE AND DID NOT ALLOW THE INPUT TAX CREDIT (I.T.C.). THE LD.AR FURTHER SUBMITTED THAT THE ASSESSMENT WAS COMPLETED U/S 143(3) AND D URING THE ASSESSMENT PROCEEDINGS, THE AO HAS CALLED FOR THE DETAILS , VERIFIED THE ENTIRE DETAILS WITH VOUCHERS AND COMPLETED THE ASSESSMENT . S INCE THE AO HAS VERIFIED THE ISSUE IN DETAIL AT THE TIME OF ASSESSMENT AND ACCEPTED THE CONTENTION OF THE ASSESSEE , THERE IS NO ERROR WHICH CAUSED PREJUDICE TO THE INTEREST OF THE REVENUE, HENCE, REQUESTED TO QUASH THE ORDER U/S 263. 5 I.T.A. NO . 183 /VIZ/201 8 SRI AMARCHAND DEVARAJJI , TENALI 6 . ON THE OTHER HAND, THE LD.DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 7 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THIS CASE, THE ASSESSMENT WAS COMPLETED U/S 143(3) . D URING THE ASSESSMENT PROCEEDINGS, THE AO HAS CALLED FOR THE DETAILS AND VERIFIED THE SAME. THE LD.AR PLACED PAGE NO.37 OF THE PAPER BOOK WH E REIN THE AO HAD ISSUED THE NOTICE U/S 143(2) AND FURNISHED THE DETAI LS VIDE PAGE NO.38 - 42 OF THE PAPER BOOK. THE LD.AR REFERRING TO PAGE NO.8 OF THE PAPER BOOK SUBMITTED THAT AS PER THE TRADING ACCOUNT, THERE WERE PURCHASES OF COPPER IN SILVER ARTICLES ACCOUNT FOR AN AMOUNT OF RS.1,88,977/ - AND IN GOLD JEWELLERY ACCOUN T, THE COPPER PURCHASES WERE 118/ - . AGGREGATE OF COPPER PURCHASE OF RS.1,89,060/ - WAS THE DIFFERENCE REFERRED BY THE LD.PR.CIT IN PARA NO.5.2. OF THE REVISIONAL ORDER . IF THE SAID SUM OF RS.1,89,060 / - IS ADDED TO THE SUM OF RS.4,32,401/ - IT WORKS OUT TO RS.6,21,461/ - WHICH WAS THE ACTUAL DIFFERENCE IN PURCHASES AS PER RECONCILIATION SUBMITTED BEFORE THE AO AS WELL AS THE PR.CIT. THE LD.PR.CIT MISDIRECTED HIMSELF AND CONSIDERED THAT THE SUM OF RS.1,89,060/ - AS MAKING CHARGES WHICH WAS NOT CORRECT. THER EFORE, THE LD.AR SUBMITTED THAT THE ACTUAL DIFFERENCE WAS RS.6,21,461/ - IN PURCHASES WHICH WAS UNDERSTATED IN THE VAT RETURNS BY 6 I.T.A. NO . 183 /VIZ/201 8 SRI AMARCHAND DEVARAJJI , TENALI CLERICAL ERROR BECAUSE OF WHICH THE ASSESSEE HAD TO FORGO THE VAT CREDIT. THE LD.AR TAKEN OUR ATTENTION TO VAT ASSESSMENT ORDER AT PAGE NO.52 TO 55 OF THE PAPER BOOK. IN PAGE NO.54 IN VAT RETURNS UNDER THE HEAD PURCHASES FOR THE FINANCIAL YEAR 2012 - 13, THE PURCHASES WERE ADMITTED AT RS.1015,40,89,153/ - AS PER THE BOOKS OF ACCOUNTS AGAINST THE TURNOVER DECLARED TO THE VAT AUTHORI TIES AT RS.1015,34,67,656/ - RESULTING IN DIFFERENCE OF RS.6,21,497/ - FOR WHICH THE VAT AUTHORITIES DID NOT ALLOW I.T.C. AND THE ASSESSEE HAS TO FORGO I.T.C. VOLUNTARILY. THE LD.AR FURTHER TAKEN OUR ATTENTION TO PAGE NO.59 OF THE PAPER BOOK, WHEREIN, THE ASSESSEE HAS SUBMITTED A LETTER TO THE AO ON 18.02.2016 EXPLAINING THE DIFFERENCE OF RS.6,21,497/ - AND FURNISHED THE PARTY - WISE DETAILS OF PURCHASES WHICH WORKED OUT TO RS.1015,40,89,152/ - WHICH INCLUDES COPPER FOR SILVER ARTICLES AT RS.1,88,977/ - AND COPP ER FOR GOLD JEWELLERY AT RS.118/ - AS DISCUSSED EARLIER IN THIS ORDER . T HE ASSESSEE HAD FURNISHED THE COMPLETE DETAILS OF THE PURCHASES BEFORE THE AO AND EXPLAINED THE DIFFERENCE OF RS.6,21,497/ - WHICH CONSISTS OF DIFFERENCE IN PURCHASE OF GOLD JEWELLERY, S ILVER OF RS.4,32,401/ - AND THE COPPER PURCHASES OF RS.1,89,060/ - AND THE SAME WAS EXAMINED BY THE AO AND ACCEPTED THE TRADING RESULTS. FROM THE ABOVE DISCUSSION IT IS CLEAR THAT THE DIFFERENCE PURCHASES ACCOUNT WAS 7 I.T.A. NO . 183 /VIZ/201 8 SRI AMARCHAND DEVARAJJI , TENALI RS.6,21,497/ - BUT RS.4,32,401/ - AS OBSERV ED BY THE LD.PR.CIT AND THE DETAILS OF THE SAME IS AS UNDER : DIFFERENCE IN GOLD JEWELLERY PURCHASES - RS. 4,32,401/ - ADD DIFFERENCE IN COPPOER PURCHASES - RS.1,89,060/ - ----------------- TOTAL - RS.6,21,497/ - ----------------- THE AO CALLED FOR THE DETAILS AND VERIFIED THE SAME AND FOUND THAT THE ASSESSEE HAS ACCOUNTED THE PURCHASES CORRECTLY. THE ASSESSEE ALSO FURNISHED THE DETAILS OF PURCHASES BEFORE THE AO, PARTY WISE AND FOUND NO DIFFERENCE. HENCE, WE OBSERVE THAT THE ASSE SSEE HAS CORRECTLY ACCOUNTED THE PURCHASES AND DID NOT OVER STATE THE PURCHASES AND THERE IS NO UNDERSTATEMENT OF INCOME ON ACCOUNT OF PURCHASES. THEREFORE, THE LD.PR.CIT HAS INVOKED THE JURISDICTION WITHOUT HAVING ANY ERROR IN THE ASSESSMENT ORDER WHICH WAS NOT PREJUDICIAL TO THE INTEREST OF THE REVENUE. HENCE, WE HOLD THAT THE ORDER PASSED BY THE LD.PR.CIT IS UNSUSTAINABLE , ACCORDINGLY QUASH THE ORDER AND ALLOW THE APPEAL OF THE ASSESSEE . 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. 8 I.T.A. NO . 183 /VIZ/201 8 SRI AMARCHAND DEVARAJJI , TENALI O RDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER , 2018 . S D/ - S D/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 30 . 1 1 .2018 L.RAMA, SPS / COPY OF THE ORDER FORWARDED TO: - 1. / THE ASSESSEE AMARCHAND DEVARAJJI , PROP.SHAH AMACHAND & CO., , D.NO.22 - 11 - 59B , T.B.ROAD , TENALI 2 . / THE REVENUE INCOME TAX OFFICER, WARD - 1, TENALI 3. THE PR. COMMISSIONER OF INCOME TAX , GUNTUR 4 . , , / DR, ITAT, VISAKHAPATNAM 5 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM