ITO Vs NCR Vehicles Private Limited (ITAT Delhi)
Sales Reconciliation Wins: ITAT Delhi Upholds Deletion of ₹13.61 Cr Sales Difference & ₹5 Lakh u/s 68 Addition — No Rule 46A Violation
Delhi ITAT dismissed the Revenue’s appeal and upheld the order of the CIT(A) deleting additions of ₹13.61 crore towards alleged excess sales and ₹5 lakh u/s 68. The AO had treated the difference between sales as per sales ledger and sales reflected in the P&L account as unexplained, while also adding ₹5 lakh for differences in creditor balances.
The Tribunal noted that the Assessee had duly reconciled the sales difference by demonstrating that items such as claims/schemes, labour receipts, customer insurance, logistics receipts, service tax and VAT were included in the sales ledger but not part of trading sales in the P&L account. Once these components were excluded, the sales as per ledger tallied exactly with the P&L figures. ITAT held that the reconciliation was based on audited financials and statutory returns, and no fresh evidence was introduced, hence there was no violation of Rule 46A.
On the ₹5 lakh addition u/s 68, ITAT observed that the AO had wrongly treated opening balances as closing balances. The amounts represented customer retention advances from suppliers, which were adjusted through purchases during the year and already offered to tax. The CIT(A)’s factual findings were upheld, and the Revenue failed to point out any infirmity. Accordingly, the appeal of the Revenue was dismissed in entirety.
FULL TEXT OF THE ORDER OF ITAT DELHI
