SHYAM INDUSTRIES,AHMEDABAD V. THE DY.CIT, CIRCLE-3(1)(1), AHMEDABAD

ITA 492/AHD/2024

AI Insights

Shyam Industries appealed against the order of the National Faceless Appeal Centre (NFAC), which confirmed the additions made by the Assessing Officer regarding discrepancies in sales figures and interest income for the assessment year 2015-16. The primary issues revolved around the difference in sales reported in the sales register and the sales declared in the income tax return, and the taxation of interest income from fixed deposits which had already been taxed in previous years. The Tribunal noted that the lower authorities had not adequately addressed the assessee's submissions and details, leading to the decision to remand the case for a thorough re-examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 315665 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANTOSH KUMAR
• Assessee Lawyers: TUSHAR HEMANI; PARIMALSINH B. PARMAR
• Keywords: Tax effect; Principle of natural justice; Assessment record
• Section: 143(3); 142(1); 263; 271(1)(c)

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH Before Dr. BRR Kumar, Vice President And Ms. Suchitra Kamble, Judicial Member Shyam Industries, Plot No. 402/403, GIDC, Naroda, Ahmedabad, Gujarat-382330 PAN: AAFFS4338E (Appellant) Vs The Dy. CIT, Circle-3(1)(1), Ahmedabad (Respondent) Assessee by: Shri Tushar Hemani, Sr. A.R. & Shri Parimalsinh B. Parmar A.R. Revenue by: Shri Santosh Kumar, Sr. D.R. Date of hearing : 17-04-2025 Date of pronouncement : 13-05-2025 आदेश/ORDER Per Suchitra Kamble, Judicial Member: This is an appeal filed against the order dated 09-02- 2024 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2015-16. 2. The grounds of appeal are as under:- “1. The Ld. CIT(A) has erred in law and on facts of the case in confirming addition of Rs. 1,38,05,007/-made by Ld. AO on account of difference in sales between sales register and sales reflected in return of income. 2. Both the lower authorities have failed to appreciate the accounting treatment of sale of export incentives. The difference of ITA No. 492/Ahd/2024 Assessment Year 2015-16 I.T.A No. 492/Ahd/2024 Shyam Industries, A.Y. 2015-16 2 Rs. 1,34,58921/-(54,86,190 + 79,72,731) represents the income which has already been offered to tax in the preceding years. 3. Both the lower authorities have failed to understand the sales register furnished by the appellant. The sales register consists of indirect taxes (VAT & CST) on sales of Rs. 3,39,966/- which does not represent income. Further, such sales register does not contain credit notes of Rs. 6,120 which needs to be deducted in arriving at correct sales figure. 4. The Ld. CIT(A) has erred in law and on facts of the case in confirming addition of Rs. 1,83,105/- made by Ld. AO on account of interest on fixed deposit which has already been offered to tax in preceding years. 5. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. The action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 6. The Ld. CIT(A) has erred in law and on facts of the case in confirming action of the Ld. AO in levying interest u/s. 234A/B/C/D of the Act. 7. The Ld. CIT(A) has erred in law and on facts of the case in confirming action of Ld. AO in levying penalty u/s. 271(1)(c) of the Act. 8. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. Total tax effect Rs. 41,96,434/-” 3. The assessee is a firm and filed return of income for assessment year 2015-16 on 23-09-2015 admitting total income of Rs. 2,02,39,390/-. The case was selected for limited scrutiny relates to sales in sales registered difference of Rs. 1,38,57,00/- in sales turnover and the interest shown at Rs. 7,135/- in respect of interest received on Dena Bank FD at Rs. 1,90,240/-. Assessment was completed u/s. 143(3) on 11-12-2017 by accepting the returned income to I.T.A No. 492/Ahd/2024 Shyam Industries, A.Y. 2015-16 3 Rs. 2,02,39390/-. Later on after scrutiny of the assessment records by the PCIT on the very same issue, the PCIT passed order u/s. 263 of the Act dated 30-03-2021 directing the Assessing Officer to make fresh assessment. The Assessing Officer issued notice u/s. 142(1) of the Act on 28-01-2022 to verify the issues pointed out by the PCIT. The assessee filed responses to the notices but the Assessing Officer has not taken cognizance of the same and passed assessment u/s. 143(3) r.w.s. 263 of the Act on 30-03-2022 thereby determining the taxable income at Rs. 3,42,27,500/- as against returned income of Rs. 2,02,39,390/-. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) has dismissed the appeal of the assessee. 5. The ld. A.R. submitted that the matter be remanded back as the Assessing Officer as well as CIT(A) has not taken cognizance of the issue involved in the appeal as well as the details filed by the assessee. 6. The ld. D.R. relied upon the assessment order and the order of the CIT(A). 7. We have heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the Assessing Officer as well as the CIT(A) has not taken the cognizance of the assessee’s submission at Annexure 2B as well as the details determining the I.T.A No. 492/Ahd/2024 Shyam Industries, A.Y. 2015-16 4 difference of sales registered and sales disclosed in the return of income as well as the details related to the interest income derived by the assessee on FD kept in Dena Bank. Therefore, it will be proper to remand back this matter to the file of the JAO/A.O. for proper adjudication of the issues on merit as per provisions of Income Tax Act. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. 8. In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 13-05-2025 Sd/- Sd/- (Dr. BRR Kumar) (Suchitra Kamble) Vice President Judicial Member Ahmedabad : Dated 13/05/2025 आदेश क\u0006 \u0007\bत ल प अ\u000fे षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील\u0012य अ\u0013धकरण, अहमदाबाद "