2019 (10) TMI 645

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....ine of shipping agency. While completing the assessment for assessment year 2014-15, the Assessing Officer made disallowance towards opening balance included transport charges, brokerage difference, cash payments made under section 40A(3), Off Dock dues and difference between bank statement and actual payments made for transport charges. Aggrieved, the assessee filed an appeal before the CIT(A), who dismissed the appeal. Aggrieved against that order, the assessee filed this appeal with the following grounds:- "1.1 Order under appeal is illegal, void and without jurisdiction in as much as the case was selected for limited scrutiny for checking 1)higher T/O in service tax return compared to ITR & 2) tax credit in IT....

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....de was at Rs.2,02,29,034/-, while the shipping and handling expenses shipping expenses recovered (sic) in debit side was also at Rs.2,02,29,034/-. Therefore, the assessee has not incurred any expenditure and hence, the disallowances made by the Assessing Officer are also not sustainable on merits. 4. Per contra, the Ld. DR invited our attention to a portion of the assessment order which is extracted as under:- "The case was selected under limited scrutiny and the CASS reason was as under:- 1. Higher turnover reported in Service tax Return compared to ITR 2. Tax credit(and receipts) in ITR is less than tax credit in 26AS Shri G. Anathan, FCA appeared and filed copy of Audit Report and the details called for u/s ....

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....up. From the details filed, it was found that the assessee has taken the opening balances of the following transport operators in the total transport charges paid and the hence the same is disalIowed." The Ld. DR submitted that the scrutiny assessment was done to verify the transactions on two issues viz., 1) higher turnover reported in service tax return compared to ITR and 2) tax-credit (and receipts ) in ITR is less than tax credit in 26AS. The Assessing Officer examined and accepted the first issue. With regard to the second issue viz., tax credit (and receipts) in ITR is less than tax credit in 26AS, the Assessing Officer examined the issues in detail as per the bolded portion extracted, supra, and made the impugned disallowances. T....

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....de appropriate disallowances, which were rightly confirmed by the Ld. CIT(A). In view of the above, the Ld. DRsubmitted that there is no merit in the assessee's appeal and hence the appeal may be dismissed. 6. The Ld. AR submitted that while examining the disallowances, the AO has included opening and closing balances of certain transactions and hence they have not been properly verified, so he pleaded that the impugned issues may be remitted back to the Assessing Officer for a fresh examination in accordance with law. 7. We have heard rival submissions, gone through relevant material on record and find merit in the submissions of the Ld DR, supra. It is clear from the assessment order, as extracted above, that the Assessing Officer u....