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It was the submission that the ld CIT(A) in the appellate proceedings took into consideration 44AB report filed by the assessee in violation of Rule 46A of I.T.Rules. It was the submission that the due date of filing of the audit report was 30.9.2008. However, the audit report was done only on 28.3.2011 much after the assessment order. The ld CIT(A) has not passed order giving any reason in writing as to under which clause of Rule 46A, he has admitted the audit report.

8. It was the submission that without properly admitting the additional evidence in the form of audit report, he sent the audit report for a remand to the Assessing Officer. The Assessing Officer on the ground that certain incomes had been offered in the remand report in excess of what has been considered in the assessment had submitted the remand report requesting that the additional income offered in the audit report was also liable to be P a g e 5 | 18 IT(ss)A Nos.30 &31/CTK/2013 IT(ss)A Nos.41 &42/CTK/2013 Assessment Years : 2008-09 & 2009-10 brought to tax over and above such income which has been assessed in the assessment order. It was the submission by ld CIT DR that the ld CIT(A) has accepted the turnover of the assessee at Rs.44,46,37,802/- as against the turnover of Rs.70,03,32,624/- determined by the AO on the basis of the confirmation given by the Asst .Commissioner of Custom House, Paradeep. It was the submission that this was wrong. It was the further submission that after admitting the additional evidence in the form of audit report, the ld CIT(A) in page 13 of his order mentions that the expenses as claimed in the audit report has remained unverified and made an estimated disallowance in respect of administrative expenses and commission charges under the head " export expenses". It was the submission that at the outset, the audit report should not have been admitted and the assessment having been done on the basis of information provided by the Asst. Commissioner, Custom House,,Paradeep, the assessment was liable to be upheld and the order of the ld CIT(A) reversed.

Comments on the Audit Report u/s 44AB along with P&L A/c and Balance vis the Assessment Order dated 29.12.2010 In the case of M/s. Serajuddin and Co, (P) Ltd, for the A.Y, 2008- P a g e 8 | 18 IT(ss)A Nos.30 &31/CTK/2013 IT(ss)A Nos.41 &42/CTK/2013 Assessment Years : 2008-09 & 2009-10 • Total income calculated In the assessment order as following:
Closing stock in the audit report is Rs.5.67 crore higher than the closing stock In the assessment order of Rs.3.52 crore. The claim of the assessee may be accepted.
The Auditor's Report u/s 44AB along with P&L A/c and Balance Sheet as submitted by the assessee can be accepted for the following reasons;
i. In a way, the Audit Report is a vindication/proof of the inferences drawn by the AO on the issues mentioned above. ii. The income reported by the assessee therein (in the audit report) is part of the income assessed by the AO.

export expenses" may be deleted insofar as no defects in the accounts had been pointed out. It was the submission that the assessee's case was search case and in the absence of incriminating material, no disallowance of the expenses is liable to be made. It was the prayer that addition as made by the ld CIT(A) is liable to be deleted.

12. We have considered the rival submissions. Admittedly, the first issue that comes up for adjudication is in regard to admission of the additional P a g e 10 | 18 IT(ss)A Nos.30 &31/CTK/2013 IT(ss)A Nos.41 &42/CTK/2013 Assessment Years : 2008-09 & 2009-10 evidence in the form of 44AB report by the ld CIT(A). As rightly pointed out by ld CIT DR, the due date of filing the 44AB report was 30.9.2008 but the audit report has been obtained only on 23.3.2011 and the assessment order has been passed only on 28.12.2010. Clearly, the assessee was not in possession of the audit report when the assessment was done. True, ld CIT(A) has not given a speaking finding in regard to clause under which the additional evidence has been admitted under rule 46A. However, a perusal of the remand report by the AO shows that the AO has not raised any objection in respect of admission of the audit report. In fact, the AO in the report dated Nil has categorically mentioned that other income disclosed in the audit report not taken in the assessment order may be accepted. In respect of expenses representing the transportation charges, stevedoring charges and unloading charges shown in the profit and loss account in the audit report are lower than the value taken in the assessment order and consequently, the claim of expenses in the audit report could be accepted. The closing stock in the audit report is higher than the closing stock in the assessment and that could be accepted. In the end, the AO mentions that the additional income assessed by the AO over and above the reported income in the audit report is based on materials/documents/piece of evidence seized during the search operation. Such additional income is not recorded in the audited books of account and the additions thus made and the enhanced income arrived at may be sustained. When this is compared P a g e 11 | 18 IT(ss)A Nos.30 &31/CTK/2013 IT(ss)A Nos.41 &42/CTK/2013 Assessment Years : 2008-09 & 2009-10 with the assessment order, it is noticed that there is no additional income assessed in the assessment order on the basis of any materials/documents/piece of evidence seized during the search operation. The additional income is determined by recasting the profit and loss account on the basis of turnover informed by the Asst. Commissioner, Custom House. Rs. 70,03,32,624/- is arrived at by taking Rs.61,59,92,274/- as intimated by the Asst. Commissioner, Custom House in respect of export sale and an amount of Rs.8,43,40,350/- intimated by the Commercial Tax Authorities, Barbil. A perusal of the remand report dated 23.11.2012 shows that in para 3, the information provided by the Custom House, Paradeep and the details provided by the assessee was compared and it was found that the total export sales of FOB value for Serajuddin & Co Pvt Ltd.,. and Yajdani International Pvt Ltd., is same for the assessment year 2008-09. The difference is only due to short shipment and wrongly taken for the different assessment years. Then, the AO does the reconciliation and gives findings that the export sales value provided by the assessee is different from the FOB value and as per the assessee's statement, realisation of sale is on the date of making invoices, when ship start from the Port. The exchange rate on that date decide the export sale value. As per the invoices and exchange rate, the export sale value for the assessment year 2008-09 for the assessee herein is Rs.36,01,28,151/-. To this, if we add the local sales as intimated by the Commercial Tax Authorities of P a g e 12 | 18 IT(ss)A Nos.30 &31/CTK/2013 IT(ss)A Nos.41 &42/CTK/2013 Assessment Years : 2008-09 & 2009-10 Rs.8,43,40,353/-, the turnover as disclosed by the assessee in 44 AB report at Rs.44,46,37,802/- is reached. Thus, clearly, the 44AB report as admitted by the ld CIT(A) and on which remand report has been called for from the AO had been examined by the AO and same has also found to be substantially correct. The AO having given a finding in the remand report that the auditor's report u/s.44AB alongwith profit and loss account and balance sheet as submitted by the assessee may be accepted for the reasons mentioned therein, it no more lies in the mouth of the AO to raise a ground in the second appeal that there has been violation of the provisions of Rule 46A. The audit report having also been reconciled with the figures as arrived at by the AO on the basis of communication received from the Commercial Tax Authorities and the Asst. Commissioner, Custom House. we are of the view that the ld CIT(A) has only accepted the remand report of the AO when directing that the figures in the audit report is to be considered in place of figures adopted by the AO in the assessment order. Consequently, we are of the view that the findings of the ld CIT(A) are on right footing and does not call for any interference.