TaxTMI 
TaxTMI 
2026 (10) TMI 586
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....gs (including excess stock), absence of stock/sales records, and the reasonableness of profit estimation based on past results; and in holding that APMC cess represented consignors' turnover and that the books reflected verifiable evidence. 2 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in admitting and relying upon additional evidence, submissions, reconciliation statements, consignment records, and other documents produced for the first time during appellate proceedings, without affording the Assessing Officer a reasonable opportunity to examine or rebut the same, thereby violating the mandatory provisions of Rule 46A(3) of the Income-tax Rules, 1962. 3. Whether on the facts and the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the additions made on account of sundry debtors and sundry creditors, without appreciating that the assessee failed to furnish complete details, confirmations, PAN, addresses, or supporting evidence despite repeated opportunities, and in accepting the claim that such balances represented intermediary/agency transactions (del credere or commission basis) without establishi....
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....the balances appearing in the balance sheet, in absence of verifiable evidence regarding the source, nature and genuineness of such balances. 7. The Ld. DR also submitted that the assessee had furnished various documents first time before the Appellate Authority. However, the AO was not provided with any opportunity to examine such additional evidences or to revert to the same under a remand report, thereby the appellate proceedings were violative of mandatory provision of rules 46A(3) of the Income Tax Rules, 1962. It is argued that there was an error in the decision of Ld. CIT(A) in deleting the additions on account of sundry debtors and creditors, without appreciating that the assessee failed to furnish complete details, confirmations, PAN, addresses or supported evidence despite repeated opportunities and in accepting the claim that such balance represents intermediary agency transactions, without establishing their genuineness and nexus with the assessee's business. It is also submitted that the assessee was unable to reconcile and substantiate the differences appearing in the balance sheet, de hors the verifiable evidence regarding the source, nature and such genuineness o....
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....,069 NA 3. Consignment Sale within of APMC 4,42,06,790 10,70,388 3,53,654 Total 19,57,50,262 51,94,457 3,53,654 9.1 The AO completely ignored the fact that the receipt of commission income would also entail the sale of goods within the market, when the appellant is Del Credere Agent acting on behalf of the consignors, had to pay the cess on consignment sale also. 10. This fact is being recorded by the Ld. CIT(A), that the appellant has offered commission of Rs. 10,70,388/- on sale of Rs. 4,42,06,790/- corresponding to the cess payment of Rs. 3,53,654/-, which is at the rate of around 2.5% and well within the market rate. The Ld. CIT(A) also noted that AO has ignored the consignment chain sample document, wherein the assessee submitted the complete chain of document, start from receiving the goods from the consignor to sale invoice to the consignor, wherein the amount of commission and other expenses are duly recorded. It was the observation that the AO has therefore completely misunderstood the nature of business of the assessee and computed the estimated turnover on the basis of cess payment only. From the reconciliation table reproduc....
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.... as credited the same in profit and loss account. Further there is no material on record to hold that the sale or the purchases done by the appellant in the capacity of an agent is bogus. In view of such observations, it is held that the debtors and creditors of the balance sheet of the assessee are purely receivable and payable and required to be shown as per the accounting standards, are not income in themselves but only an intermittent entry, awaiting squaring off on behalf of the principle. The addition of Rs. 2,36,39,718/- on account of sundry debtors and Rs. 1,42,08,748/- on account of sundry creditors was deleted. 15. Regarding unexplained loan the Ld. CIT(A) had held that the addition made by the AO for Rs. 2,59,779/- against which the assessee is not in appeal therefore the issue is settled. 16. Regarding nonpayment of TDS on interest payment of Rs. 2,65,431/- the AO had made the addition u/s 40(a)(ia) of the Act, however such disallowance has been deleted by the Ld. CIT(A) by observing that the assessee has paid total interest of Rs. 17,70,549/- during the relevant assessment year out of which Rs. 11,40,260/- was paid to the bank towards the overdraft / Cash Credit ....
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....sessee amounting to Rs. 11,97,930/-,as the assessee was failed to provide supporting evidence such as confirmation and details called for. This issue was remanded back to the file of the AO for verification of evidence furnished by the assessee before the Ld. CIT(A). Therefore, the ground was set aside to the file of the AO being allowed for statistical purposes. 20. Based on aforesaid facts of each addition/disallowance made by the AO which either are deleted by the Ld. CIT(A) or confirmed or set aside to the file of the AO, the assessee relied on the order of the Ld. CIT(A) by accepting his decision, however the revenue is in appeal regarding the reliefs granted by the Ld. CIT(A) to the assessee. 21. We have considered the rival submission and perused the material available on record. Admittedly, in present case the AO had completed the assessment after lengthy deliberations on various issues, arises during the assessment. Such issues were surfaced on account of the survey action conducted in the case of assessee as certain information were revealed during that survey action. Since, certain addition/disallowances were upheld by the Ld. CIT(A) or the issues are set-aside to ....
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....ion on a generalized statement that the assessee is recognizing commission arising out of such debtors or creditors. However, no such factual verification has been carried out by the Ld. CIT(A). The AO has requested the assessee to furnish necessary evidences regarding the balances appearing in the books of assessee, which in our considered opinion was duty and obligation of the AO which he did. The assessee was failed to furnish complete details before the AO, which the assessee should have furnished, merely saying that there was no allegation that the assessee was involved in bogus transaction cannot spare the assessee from furnishing necessary details before the AO, which were called for in terms of provision of section 68. Even if the entries and the balances are reflecting on behalf of principle, the consolidated confirmation could be obtained and furnished before the AO to verify the genuineness of the transactions, instead of deleting the addition under generalized observations. We, under such facts and circumstances, constrained to differ with the decision of the Ld. CIT(A), therefore, restore this issue back to the file of Ld. AO to adjudicate it afresh. Reasonable opportu....