Accounting discrepancies cannot be termed as suppression of purchases in the strict sense

Last updated: 02 October 2021

Save Share

Quick Summary

The Income Tax Appellate Tribunal (ITAT) in Bangalore has ruled that simple accounting discrepancies cannot be strictly defined as a 'suppression of purchases'. The case involved an assessee who had an addition of Rs. 3,84,730 made by the Assessing Officer. The assessee argued this difference was due to accounting errors between their business and another entity, not a deliberate hiding of purchases. The Tribunal allowed the appeal, acknowledging the distinction.

Court :
ITAT Bangalore

Brief :
This appeal at the instance of the assessee is directed against the CIT(A)�s order dated 14.08.2017. The relevant assessment year is 2006-2007.

Citation :
ITA No.304/Bang/2021: Asst.Year 2006-2007

IN THE INCOME TAX APPELLATE TRIBUNAL
BANGALORE “SMC-C” BENCH, BANGALORE
Before Shri George George K, Judicial Member
ITA No.304/Bang/2021: Asst.Year 2006-2007

M/s.Gowdara Jayadevappa Silks
& Sarees, No.672, Chowkipet
Davangere – 577 001.
PAN : AADFG2804P.

The Asst.Commissioner of
Income-tax, Circle – 1
Davangere

Appellant by : Sri.K.Y.Ningoji Rao, CA
Respondent by : Sri.Ganesh R.Ghale, Standing Counsel
Date of Hearing : 14.09.2021
Date of
Pronouncement : 20.09.2021
O R D E R

This appeal at the instance of the assessee is directed against the CIT(A)’s order dated 14.08.2017. The relevant assessment year is 2006-2007.

2. The solitary issue argued was that whether the CIT(A) was justified in upholding the addition of Rs.3,84,730 disregarding that the impugned amount was offered to tax by the assessee in assessment years 2007-2008 and 2008-2009, which tantamount to double taxation.

3. Aggrieved by the addition of Rs.3,84,730, the assessee preferred an appeal to the first appellate authority. Before the first appellate authority, it was contended that the difference was due to certain accounting discrepancies in the books of account of the assessee and M/s.Ajay’s Bangalore and not due to suppression of purchases, as alleged by the Assessing Officer. The assessee filed elaborate written submission before the CIT(A). The extracts of the same are reproduced at pages 14 to 19 of the impugned order.

4. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on this 20th day of September, 2021.

Please find attached the enclosed file for the full judgement

FAQ :

No, the ITAT Bangalore has ruled that accounting discrepancies cannot be strictly termed as suppression of purchases.

The appeal concerned whether the addition of Rs. 3,84,730 was justified, with the assessee arguing it was due to accounting discrepancies, not suppression of purchases.

The assessee contended that the difference of Rs. 3,84,730 arose from accounting discrepancies between their business and M/s. Ajay's Bangalore, and not from suppressing purchases.

The Income Tax Appellate Tribunal allowed the appeal filed by the assessee for statistical purposes.

Attached File : 1442821_4496_1632130911_304_gowdara_jayadevappa_silks__sarees.pdf

downloaded 291 times

168 Views Comment Share Income Tax Report

Judgement posted by

Poojitha Raam Vinay

Practice

I simplify complex income tax, TDS, banking, and investment updates into practical insights for taxpayers, salaried professionals, pensioners, and senior citizens. I regularly write on ITR filing, tax compliance, savings schemes, and the latest financial rule changes in India.

View Judgements

Comments