Tribunal rules in favor of assessee on income addition appeal, allows fresh adjudication by Assessing Officer.

The Tribunal partially allowed the appeal in favor of the assessee, concerning the addition of income based on reconciliation statements. The delay in filing the appeal was condoned due to circumstances beyond the company's control. The Tribunal directed a fresh adjudication by the Assessing Officer to thoroughly consider the material submitted by the assessee regarding discrepancies in income addition.

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Issues: Delay in filing appeal, Addition of income based on reconciliation statements

Delay in Filing Appeal:
The appeal was filed with a delay of 28 days, attributed to the illness of the accountant. The Director of the company stated that the delay was beyond their control. The Authorized Representative reiterated the same arguments during the hearing, supported by an affidavit and application for condoning the delay. Considering the circumstances and facts, the Tribunal decided to condone the delay in filing the appeal.

Addition of Income based on Reconciliation Statements:
The primary issue revolved around the addition of Rs. 33.82 lakhs to the total income of the assessee. The Assessing Officer (AO) found discrepancies in the labour charges received by the assessee and the amounts declared for taxation. The AO directed the assessee to reconcile the differences, but upon review, found variations in the reconciliation statements submitted. The First Appellate Authority (FAA) also upheld the AO's decision, stating that the reconciliation statements were not credible and that the explanations provided were insufficient. However, during the appeal before the Tribunal, the assessee argued that the AO had wrongly considered certain elements like TDS and VAT as income, and had not properly evaluated the debit notes and ledger accounts. The Tribunal agreed that further verification was necessary and restored the issue back to the AO for fresh adjudication, directing a thorough consideration of the material submitted by the assessee.

In conclusion, the Tribunal partially allowed the appeal, deciding in favor of the assessee on the ground of addition of income based on reconciliation statements. The order was pronounced on 5th August 2016.

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