TaxTMI 
TaxTMI 
2023 (11) TMI 1147
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....viz "Muse". The assessee is also into trading of 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....
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....ng to Rs. 5,30,91,237, unabsorbed depreciation of Rs 1,62, 16,486/- and claimed refund amounting 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 Co....
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....s of purchase return and copy of Form F submitted during the course of assessment is enclosed as Annexure 2. Thus, the LAO has grossly erred in ignoring the details submitted and adding 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 hear....
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....to the assessee" (iii) Centum Finance Limited Vs National Faceless Assessment Centre Delhi & Anr. W.P.(C) 6977/2021 & CM APPL. 22034/2021 (Delhi High Court) Hon'ble high court held that impugned assessment order has been passed without providing adequate 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, with....
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....closing stock and there will not be any impact on income. 2. Without prejudice to Ground 1, the Leaned Commissioner of Income Tax- (Appeals) has erred in law in not giving directives to the Assessing Officer to do reassessment after proper verification. 3. Without prejudice to Ground 1 and Ground 2, the appellant was not given reasonable 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 as....
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....ecord that assessee's main as well as major income is from commission. It is very much visible from the statement of profit and notes forming part of the financial statements in particular Note - 14 and Note - 16. It clearly shows that the assessee's main income is commission income which matches with the revenue from operation declared by the assessee. It is brought to our notice that assessee has to declare purchases and sales received from Sabyasachi products which is on consignment basis. However, as per the requirement of VAT, assessee has to declare both the purchases as well as sales in its Books of Accounts and assessee has to declare the goods kept under its control i.e., opening goods on consignment basis and total purchases for the year less purchase returns during the year under consignment. 15. Since the goods are received by the assessee on consignment basis assessee may have to return consigned goods back to Sabyasachi in case of defective or unsold stocks. In the line of trade particularly with respect to consignment sales assessee is not the owner of the goods and he is responsible to make the sales on behalf of the other party and in return assessee is eligible....