ITAT Deletes ₹37.87L Addition After AO Accepts Turnover Reconciliation: Holds CIT(A)’s Remand of 144 Order Improper [Read Order]
ITAT deleted the ₹37.87 lakh addition, noting the AO had already accepted the turnover reconciliation and the CIT(A) wrongly set aside the assessment.
The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) allowed the appeal by deleting the addition of ₹37,87,140, after noting that the Assessing Officer (AO) had accepted the assessee’s turnover reconciliation and held that once factual verification was complete and the AO himself confirmed the correctness of figures, the Commissioner of Income Appeals (CIT(A)) was not justified in setting aside the assessment under Section 144 of the Income Tax Act, 1961.
The assessee, Monika Jain, engaged in business of Media & Broadcasting under the trade name of Dynamic New Media had filed her return.
As no one appeared during assessment proceedings, the AO completed the assessment ex parte under Section 144, making an addition of ₹37,87,140 on the allegation of mismatch in turnover between the Profit & Loss account and audit report.
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https://www.taxscan.in/ex-parte-assessment-order-u-s-144-passed-by-upholding-addition-of-unexplained-investment-itat-restores-matter-considering-old-age-of-assessee/468913
Before the CIT(A), the assessee furnished reconciled turnover details, explaining that the figures matched once the correct heads were aligned. The CIT(A) called for a remand report from the AO.
In the remand proceedings, the AO verified the reconciliation and accepted the turnover figures as correct, reporting that there was no difference in turnover after reconciliation.
However, despite this clear acceptance, the CIT(A) did not delete the addition, and instead set aside the assessment and directed the AO to redo it.
Before the Tribunal, the assessee argued that when the AO had already confirmed the reconciliation in the remand report, the CIT(A) could not ignore that factual finding and could not set aside the assessment again. The Department relied on the orders of the lower authorities.
The Bench comprising Rathod Kamlesh Jayantbhai (Accountant Member) and Dr. S. Seethalakshmi (Judicial Member) observed that the very basis of the addition, turnover mismatch, did not survive after the AO’s verification.
The Tribunal noted that the AO’s remand report clearly accepted the assessee’s reconciliation and stated that the actual turnover was correctly shown.
https://www.taxscan.in/top-stories/no-merit-in-assessees-objection-of-lack-of-hearing-opportunity-us-144a-itat-upholds-income-tax-assessment-on-best-judgment-by-ao-1428576
The Tribunal held that the CIT(A), after calling for a remand report, could not have overlooked the AO’s own finding and that setting aside the assessment once again was unwarranted when the factual issue stood resolved.
Accordingly, the Tribunal deleted the addition of ₹37,87,140 and held that the CIT(A)’s order setting aside the assessment was incorrect in view of the AO having already verified and accepted the reconciliation.
The Assessee was represented by Ashish Goyal, while Gautam Singh Choudhary appeared for the Revenue.
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