2018 (12) TMI 1489 - AT - Income Tax

Tribunal partially allows appeal, directs reassessment on income and commission, emphasizes evidence substantiation.

The Tribunal allowed the appeal partially, directing reassessment on income addition and commission payment issues. The appellant was instructed to ... Difference in the 26AS statement and income as shown in Profit and Loss account - Held that:- The different methods of revenue recognition may also create difference between form No.26AS statement and income as shown in Profit and Loss account. Therefore, taking into account these reasons of differences, as explained above, we are of the view that a reconciliation statement may be prepared by the assessee, explaining the reasons of differences between form No.26AS statement and income as shown in Profit and Loss account and may be submitted before the assessing officer for his perusal - remit the matter back to the file of the assessing officer to adjudicate the issue after taking into account the reconciliation statement. Disallowance on account of commission paid - Held that:- We note that impugned order is an ex parte and assessee could not plead his case before the ld CIT(A) therefore, we are of the view that one more opportunity should be given to the assessee to plead his case and submit relevant documents to prove his bona fide before the ld assessing officer. Therefore, we set aside the order of ld CIT(A) and remit the matter back to the file of the assessing officer to adjudicate the issue afresh. We also direct the assessee to submit the relevant documents and explanation before the ld AO to prove his bona fide. Statistical purposes, the appeal of the assessee is allowed. Issues:1. Addition of income based on 26AS statement and P&L statement.2. Double taxation on the same income for consecutive assessment years.3. Disallowance of commission paid as business expenditure.4. Interest charged under sections 234C and 234D.Analysis:1. The appellant contested the addition of Rs. 66,04,644 based on discrepancies between the 26AS statement and P&L statement. The Tribunal noted various reasons for such differences, like revenue recognition methods and treatment of advances. The Tribunal directed the appellant to prepare a reconciliation statement to explain the variances and submit it to the assessing officer. The matter was remitted back to the assessing officer for further consideration, allowing the appeal on this issue.2. The appellant argued against double taxation of the same income for consecutive assessment years. However, the Tribunal did not address this issue explicitly in the judgment, as it focused on the specific additions and disallowances made by the authorities.3. Regarding the disallowance of Rs. 26,94,101 on commission paid, the Tribunal observed that the appellant failed to provide evidence of services rendered against the commission payment. The matter was remitted back to the assessing officer to allow the appellant an opportunity to present relevant documents and explanations to justify the commission payment. The appeal was allowed on this ground for further adjudication.4. The appellant raised a ground concerning interest charged under sections 234C and 234D of the Income Tax Act. The Tribunal deemed this ground as consequential and did not delve into detailed adjudication. Consequently, the appeal was allowed on this issue for statistical purposes.In conclusion, the Tribunal granted partial relief to the appellant by directing a reassessment of the issues related to income addition and commission payment, while acknowledging the consequential nature of the interest charge issue. The judgment highlighted the importance of providing sufficient evidence and explanations to support claims during assessment proceedings.