AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (3) TMI 734
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee declared a total income of Rs. 2,31,910/- and the same was processed u/s 143(1) on 21.07.2009. Thereafter the case was converted into scrutiny and a notice u/s 143(2) was issued and while making assessment u/s 143(3) of the Act, the A.O observed that the assessee received handling charges of Rs. 17,51,511/- from M/s. Cargil India P. Ltd., for the grains purchased for them. He has also gone through the ledger account extract furnished by the assessee and highlighted that the assessee had shown an amount of Rs. 16,87,585/- as against Rs. 17,51,511/- received, resulting in discrepancy of Rs. 63,926/-. Similarly, the A.O. also noticed that the assessee received commission of Rs. 12,55,920/- from M/s. Cargil India P. Ltd., for the grains purchased for them. In sum and substance the Assessing Officer admitted in the assessment that the assessee's main source of income is purchase and sale of grains as commission agent and it derives commission as well as handling charges. In fact Income Tax Authorities having conducted a survey u/s 133A of the Act, the A.O. had taken into consideration the report of the DDIT (Inv.) to arrive at the conclusion that the discrepancy in handling charges a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... The consignment bills are raised on the principle / consignor which includes value of the stock transferred from the godowns plus the hamali, market fee, bardan etc., which will be settled by the principal /consignor after receiving stocks from the assessee firm. This is the regular practice by the assessee firm in dealing with the consignment stock. As such it is submitted that the amount shown under the consignment stock in the balance sheet to the assets side is the stock belonging to the principal / consignor on which the assessee firm does not have any right to sell stocks at their will and wish. The stocks are to be sold only at the instructions of the principal / consignor, for which the assessee firm raises the consignment bill as stated above. We submit that the consignment bills file has been already taken by then IT Authorities who have conducted the survey u/s 133A and verified by the that Assessing Officer at the time of assessment. We are submitting herewith five ledger account copies of "maize godown account" for your ready reference. We are also herewith submitting the copy of the "maize for consignment" account wherein you can seen the amount of maize....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hase is also to be considered in the hands of the assessee and if the same is considered, there will be no bearing on the gross or net profit declared and there would be no revenue loss. It was also clarified that the general practice followed in such cases is to show the stock purchased on behalf of the consigner separately and at the end of the year it is shown in the balance sheet under the head "maize consignment stock" and this practice is followed even in the earlier years and in this regard the relevant balance sheet, Profit and Loss Account for the A.Y. 2006-07 was also placed before the A.O. It was also stated that this was considered by the then Assessing Officer while completing the original assessment. It was further submitted that there is no jurisdiction to reopen the assessment, without any additional information. In other words, when an assessment is sought to be reopened after expiry of four years period of limitation, there should be some independent material in the possession of the Assessing Officer to show that some income has escaped assessment and it was on account of omission on the part of the assessee to place such material whereas the entire material was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that the order contains virtual reproduction of the grounds of appeal, statement of facts filed by the assessee, order passed by the Assessing Officer and the submissions of the assessee and even in his conclusions, we notice virtual reproduction of the order of the Assessing Officer indicating that as a quasi-judicial authority he has not done sufficient justice to the case on hand and proceeded to reproduce the same sentences, picking out from the assessment order, while confirming the assessment order. He omitted to consider the aspect of reopening of assessment since this issue was not figuring in the assessment order. As rightly pointed out by the Learned Counsel for the Assessee there is a lack of application of mind on the part of the Ld. CIT(A). 9. The assessee has filed a detailed explanation before the Assessing Officer indicating the method of accounting followed by it with regard to entries made vis-à-vis the purchases made on behalf of the consigner but both the Assessing Officer as well as the Ld. CIT(A) has not properly appreciated the points. It is not in dispute that the assessee has been following this method of accounting over the years and even if it is ....