2023 (12) TMI 627 - AT - Income Tax

Assessment order set aside under sections 69B and 115BBE for gold silver stock valuation discrepancies

Janakkumar Nandlal Patel, C/O M.S. Chhajed and Co. CA, “Kamal Shanti” Versus The ACIT, Circle-1 (1) (1), Ahmedabad

Janakkumar Nandlal Patel, C/O M.S. Chhajed and Co. CA, “Kamal Shanti” Versus The ACIT, Circle-1 (1) (1), Ahmedabad - TMI Issues Involved:The issues involved in the judgment are related to the correctness of the additions made by the Assessing Officer under section 69B of the Income Tax Act, 1961 and the estimation of profit based on certain discrepancies in the audit report and turnover figures.Assessment Year 2018-19:The appeal was filed by the Assessee against the appellate order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, arising from the assessment order under section 143(3) of the Income Tax Act for the Assessment Year 2018-19.Discrepancies in Stock Valuation:During scrutiny assessment, it was found that the Assessee had discrepancies in the valuation of Gold and Silver stock, leading to the addition of Rs. 79,62,20,983 under section 69B r.w.s. 15BBE of the Act. The Assessing Officer highlighted errors in the audited balance sheet and discrepancies in turnover figures reported in the STR report.Appeal Dismissed by NFAC:The Assessee's appeal before the Ld. NFAC was dismissed as the submissions failed to provide concrete evidence to refute the discrepancies highlighted in the audit report. The NFAC emphasized the importance of the accuracy of audit reports in Form 3CD and the need for corroborating evidence to challenge the findings.Grounds of Appeal:The Assessee raised grounds of appeal against the order passed by the Ld. CIT (A), challenging the additions made by the Assessing Officer under section 69B and the estimation of profit. The Assessee sought reconsideration and modification of the grounds of appeal.Contentions and Submissions:The Assessee's counsel submitted a detailed Paper Book containing relevant documents to support the claim that errors in the audit report were inadvertent and clerical in nature. The Assessee requested a reconsideration of the matter by the Assessing Officer based on the correct valuation of stock and other supporting documents.Judgment and Directions:After careful consideration, the Tribunal found merit in the Assessee's contentions regarding the errors in the audit report and the need for a fresh assessment. The Tribunal directed the matter to be restored to the file of the Assessing Officer for a denovo assessment, emphasizing the importance of cooperation from the Assessee and the need for a fair opportunity to present their case.Conclusion:The appeal filed by the Assessee was allowed for statistical purposes, and the matter was remanded back to the Assessing Officer for a fresh assessment, with specific directions to consider the Assessee's claims and provide a fair opportunity for explanation and cooperation.