2022 (3) TMI 655 - AT - Income Tax

Tribunal deletes tax additions due to discrepancies. Interest issue left for determination.

M/s Shri Jeen Mata Buildcon Pvt. Ltd. Versus The ITO Ward 4 (2) Jaipur

M/s Shri Jeen Mata Buildcon Pvt. Ltd. Versus The ITO Ward 4 (2) Jaipur - [2022] 97 ITR (Trib) 706 (ITAT [Jai]) Issues Involved:1. Addition of Rs. 18,78,750/- and Rs. 15,23,978/- due to differences between TDS Form 26AS and books of accounts.2. Lumpsum disallowance of Rs. 2,00,000/-.3. Charging interest under sections 234A, 234B, 234C, and 234D, and withdrawal of interest under section 244A of the Income Tax Act.Issue-wise Detailed Analysis:1. Addition of Rs. 18,78,750/- and Rs. 15,23,978/- due to differences between TDS Form 26AS and books of accounts:The assessee, engaged in the business of labor contractor supplier, filed its return declaring an income of Rs. 5,21,007/-. The case was selected for scrutiny due to a discrepancy between the turnover reported in Form 26AS and the books of accounts. The Assessing Officer (AO) observed a turnover of Rs. 67,84,050/- in the books, while Form 26AS reflected Rs. 86,62,800/-, resulting in an addition of Rs. 18,78,750/-. Similarly, for M/s Bhairav Township Pvt. Ltd, a difference of Rs. 15,23,978/- was noted due to discrepancies between income offered and expenses booked. The CIT(A) upheld these additions, stating that the assessee failed to provide documentary evidence to substantiate their claims.The assessee argued that their books were duly audited, and no defects were found. They contended that the AO made the addition solely based on Form 26AS without rejecting the books of accounts. The assessee provided a reconciliation chart showing that the discrepancies were due to timing differences in income recognition. The Tribunal concluded that the AO's additions were not justified as the books were audited, and proper explanations were provided. Therefore, the additions of Rs. 18,78,750/- and Rs. 15,23,978/- were deleted.2. Lumpsum disallowance of Rs. 2,00,000/-:The AO made an ad-hoc disallowance of Rs. 2,00,000/- from various expenses such as travelling, consumables, conveyance, diesel, and staff welfare, citing revenue leakage and personal use. The CIT(A) upheld this disallowance without providing separate findings.The assessee argued that their books were audited, and no defects were found in the vouchers. They presented a comparative chart showing that the expenses were reasonable and even lower than the previous year. The Tribunal noted that the AO and CIT(A) did not identify any specific defects or personal nature of the expenses. Given the absence of evidence supporting the disallowance and the comparative analysis showing reasonable expenses, the Tribunal deleted the lumpsum addition of Rs. 2,00,000/-.3. Charging interest under sections 234A, 234B, 234C, and 234D, and withdrawal of interest under section 244A:The assessee contested the charging of interest under sections 234A, 234B, 234C, and 234D, and the withdrawal of interest under section 244A. The Tribunal noted that this ground was consequential and would depend on the outcome of the main issues.Conclusion:The Tribunal allowed the appeal, deleting the additions of Rs. 18,78,750/- and Rs. 15,23,978/- and the lumpsum disallowance of Rs. 2,00,000/-. The issue of interest was deemed consequential and to be addressed in accordance with the law. The order was pronounced on 08/03/2022.