AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 1147
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....f products / apparels of "Sabyasachi" brand for which it receives commission. The assessee also receives rental income in respect of letting off of part of its premises viz. "Upadrastha House" own by it. During the year under consideration, assessee has declared revenue from operations at Rs..22,78,62,111/-. After considering the submissions of the assessee with regard to sales, purchases and expenses, Assessing Officer observed that assessee has declared in Note 16 of the Profit and Loss Account that assessee has worked out cost of purchases after excluding purchases return of Rs..6,98,35,282/- (Previous Year Rs..3,06,11,947/-) and closing balance of goods on consignment amounting to Rs..3,31,04,233/- (previous year Rs..3,85,86,048/-). In this regard, assessee was asked to furnish complete details of the purchases return and goods on consignment and also asked to justify its allowability. 4. In response, Ld. AR of the assessee submitted that assessee has not purchased the goods in actual but taken up on consignment basis, the details of purchases return of consignment goods is not maintained. However, the presentation has been made in profit and loss account only for the purpose ....
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....ting to Rs 29,15,982/- 4. The appellant's case was selected for scrutiny and completed u/s 143(3)(ii) of the Act and following additions/disallowances were made in the assessment a. Addition on account of purchase return of Rs. 6,98,35,282/- 5. After making the above addition the total income of the appellant was determined at Rs. 2,59,23,120/- after set off of brought forward loss of Rs. 5,46,01,204/- instead of Rs. Nil income claimed by the appellant. 6. Aggrieved from the assessment the appellant filed an appeal before CIT(A) challenging the additions made in the assessment order. In the light of above facts, we hereby make following submissions for your Honor's kind consideration: Ground 1 ADDITION On ACCOUNT OF PURCHASE Return - Rs. 6.98.35.282/- 1.1 The Learned Assessing Office (the "LAO") has erred in law and on the fact of the case in making disallowance of Rs. 6,98,35,282/- without understanding the reconciliation between the books and the VAT returns. 1.2 The appellant is a Consignment Agent of M/s Sabyasachi Couture and earns commission on the sales done by it. 1.3 As explained to the LAO and also as explained in statement of facts in case of cons....
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....ng the purchase return to income. Ground 2 and Ground 3: Addition made without issuing any show cause notice and addition without proper justice thus violating the principle of natural justice. 2.1 Without prejudice to submissions in Ground 1. The appellant has not been given any further opportunity for understanding the transactions nor any show cause notice issued before making any addition The appellant came to know about the addition of Rs. 6,98,35,282/-only on receipt of the Assessment Order thus violating the principle of natural justice which is illegal and bad in law and needs to be deleted 2.2 Reliance is placed on the following rulings of various Court and various High Courts (1) MAP REFOILS INDIA LTD. vs National E Assessment Centre Delhi 2022 TAXSCAN (HC) 1103 According to the petitioner, the respondent authority passed the final assessment order, which contained a significant addition of Rs. 92,42,86,979, without giving the petitioner a chance to be heard The matter was relating to assessment done under the National Faceless Assessment Scheme. The Hon'ble High Court held as under "It is not in dispute that in facts of the case no draft assessment along ....
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.... opportunity to submit reply in response to the show cause-cum-draft assessment order dated 23rd May, 2021. High Court observed and opined that these notices required compliance when the e-filing portal was dysfunctional, thus violative of the principle of natural justice. The Respondent/Revenue will be at liberty to call for further information, if thought necessary, before proceeding to frame the Assessment Order" (iv) Shiv Kishor Construction Private Limited Vs UOI (Patna High Court) Hon'ble High Court held that it is not disputed that one of the impugned orders stands passed in violation of principles of natural justice. Impugned order dated 2nd of March, 2020 is passed by the Deputy Commissioner of State Tax, Patna Central Circle, Bihar, Patna who issued a notice asking the petitioner to show cause by a particular date. However, for unexplained reasons and circumstances, without any prior intimation or knowledge, the matter was preponed and without affording any opportunity of hearing, decided, holding the view of the revenue. The order does entail civil and pecuniary consequences, causing prejudice to the petitioner. On all fours, principles of natural justice. st....
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....easonable opportunity during the assessment nor show cause notice was issued by the LAO proposing addition of Rs. 6,98,35,282 thus denying the principle of natural justice to the appellant. 4. The Appellant craves leave to add, amend, alter or delete any of the above ground of appeal." 11. At the time of hearing, Ld. AR of the assessee brought to our notice Page No. 2 of the Assessment Order and submitted that purchases return was not considered by the Assessing Officer and further, he submitted that Ld.CIT(A) at Page No. 12 of the order gave the finding merely relying on the Assessment Order. Ld. AR of the assessee submitted that the tax authorities have not considered the fact that purchases were not claimed by the assessee as an expense in first place. He raised the question can the Assessing Officer make disallowance when assessee itself has not claimed it as an expenditure. Further, he brought to our notice Page No.18 of the Paper Book and he brought to our notice Note -14 of notes forming part of the financial statements where assessee has declared sale of Sabyasachi products and also commission received from Sabyasachi products. He submitted that in Note-16 as observed by....