Addition of turnover differential in audit report and ITR upheld because no valid rationale was provided
Fact and issue of the case
This is an appeal filed by the assessee-Ravindra Arvind Ranade against the order of Commissioner of Income Tax (Appeals) [National Faceless Appeal Centre], Delhi, dated 30.01.2023 for A.Y.2015-16, emanating from the order u/s. 143(3), dated 20.12.2017 passed by the ITO, Ward-11(2), Pune. The assessee has raised the following grounds of appeal
The learned AO has erred in making addition of Rs.19,74,561/- to the total income of assessee under pretext of mismatch in the amount of sales turnover as per accounts and the learned CIT(A) in sustaining the same
The learned AO has erred in making addition of Rs.19,74,561/- alleging that there was a difference in sales/receipts as per accounts, thus, resulting in understatement of income
The revenue authorities did not consider the fact that difference in gross turnover / sales as alleged, was attributable to service tax levy and thus there was no any difference
The addition made by the AO is beyond the scope of limited scrutiny and thus not as per the norms and issues selected under scrutiny. Therefore, the addition made in assessment order is void and bad in law
The assessee prays before your honour that difference in receipts/sales which the assessee has agreed in assessment and/appellate proceedings be ignored and deleted since the said agreement was not in keeping with facts and circumstances of the case and the law
The assessee prays before your honour that difference in gross receipts/sales cannot be taxed, but profit element therein needs to be taxed, if ultimately the addition is sustained
The learned AO and the CIT(A) has erred in not considering submissions made by the Assessee while making assessment
The learned CIT(A) erred in disposing the appeal without affording adequate opportunity of being heard
The assessee craves leave to add, alter, amend, modify, and delete all or any of the grounds of appeal
Observation of the court
The assessee has claimed that only profit element should be taxed, if at all addition is sustained. The assessee in income and expenditure account, had claimed expenditure for AY 2015-16, but shown less turnover, therefore the expenditure pertaining to the said amount of Rs. 19,74,561/- has already been claimed by the assessee in profit and loss account. Therefore, the AO was right in making addition of entire amount of Rs. 19,74,561/-, therefore there is no merit in the assessee’s claim that only profit shall be taxed, hence, ground No.6 of the assessee is dismissed
The assessee has alleged that AO and the ld.CIT(A) has not considered the submissions of the assessee, however, there is no merit in the said ground as both the AO and the ld.CIT(A) had reproduced the assessee’s submissions and have arrived at the decision after considering his submissions. Therefore, ground No.7 of the assessee is dismissed
The assessee has alleged that ld.CIT(A) has disposed the appeal without affording adequate opportunity of being heard to the assessee. On perusal of the ld.CIT(A)’s order, it is observed that ld.CIT(A) has reproduced the assessee’s submissions and after considering the submissions, ld.CIT(A) has passed the order. Therefore, there is no merit in the allegation leveled by the assessee that ld.CIT(A) has not given proper opportunity of hearing
Therefore, ground No.8 of the assessee is dismissed.
The assessee has not added, altered, amended or deleted any of the grounds of appeal. As the ground No.9 is academic in nature, the same is dismissed. No other ground has been pleaded by the assessee
In the result, appeal of the assessee is dismissed
Order pronounced in open Court on 11th May, 2023
Conclusion
In the result, appeal of the assessee is allowed and ruled in favour of the assessee
Read the full order from here
Ravindra-Arvind-Ranade-Vs-ITO-ITAT-Pune-2
