2023 (4) TMI 177 - AT - Income Tax

Assessee's Appeal Partially Allowed in Tax Adjustment Dispute

M/s. Airlink International Versus CPC Bangalore/ITO, Ward 5 (2), Jaipur.

The Tribunal partly allowed the appeal of the assessee concerning adjustments made by the AO (CPC) under sections 143(1)/154 of the Act. The Tribunal ... Application of NP rate of 8.16% on the differential receipt reflected in Form 26AS - Assessee has not shown the receipt on which TDS u/s 194H has been deducted - HELD THAT:- Since the assessee was very much aware regarding deduction of TDS under section 194H on payment by the parties/companies, even then no effort was made to get the same corrected from the said companies. Therefore, at this stage assessee cannot point out the defects in the orders passed by the revenue authorities. Arguments of the ld. A/R that at the most the addition could have been restricted to profit earned @ 8.16% in respect of these receipts - As this argument of the ld. A/R could not be upheld because of the simple reason that as per the provisions of section 44AD(6) provisions of this section are not applicable on a person earning income in the nature of commission. Thus the said argument of the ld. A/R is not tenable. Since the revenue authorities have rightly appreciated the facts and considered the said receipts as income from other sources but still in these circumstances assessee was entitled to deduction of expenditure incurred against such receipts. Therefore, the AO is at liberty to verify the expenditure, if so claimed by the assessee within 30 days from the date of receipt of this order. With these observations, we partly allow the grounds raised by the assessee. Appeal of the assessee is partly allowed. Issues:1. Adjustment made by AO (CPC) in processing the return u/s 143(1)/154 of the Act.2. Adjustment of Rs. 1,26,459/- made by AO (CPC) by applying n.p. rate on differential receipt.3. Adjustment of Rs. 12,95,311/- made by AO (CPC) for commission receipt without deduction of expenditure.Issue 1 - Adjustment by AO (CPC):The appellant contested the adjustment made by the Assessing Officer (AO) in processing the return under section 143(1)/154 of the Act. The appellant argued that the LD. CIT (A) erred in upholding the adjustment, challenging the correctness of the adjustment on factual and legal grounds. However, Ground No. 1 raised by the appellant was dismissed as not pressed.Issue 2 - Adjustment of Rs. 1,26,459/-:The appellant disputed the adjustment of Rs. 1,26,459/- made by the AO (CPC) by applying a particular rate on the differential receipt. The appellant contended that the addition based on Form 26AS was inaccurate and should be deleted. The Tribunal partially allowed the appellant's grounds, considering the arguments presented by both parties and the facts of the case.Issue 3 - Adjustment of Rs. 12,95,311/- for commission receipt:The core issue revolved around the adjustment of Rs. 12,95,311/- made by the AO (CPC) for commission receipt without allowing any deduction of expenditure incurred. The appellant argued that the nature of the receipt was similar to other receipts and should not be assessed as income from other sources. The Tribunal observed that the appellant failed to substantiate the arguments regarding the reimbursement of freight charges paid and the TDS deductions under different sections. The Tribunal partially allowed the appellant's grounds, directing the AO to verify the expenditure claimed by the appellant within a specified timeframe.In conclusion, the Tribunal partly allowed the appeal of the assessee, addressing the various adjustments made by the AO (CPC) and the challenges raised by the appellant regarding the nature of receipts and deductions of expenditures. The Tribunal's decision was based on a thorough analysis of the facts, legal provisions, and arguments presented by both parties, resulting in a partial relief for the appellant.