TaxTMI 
TaxTMI 
2013 (11) TMI 8
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....essee to explain as to why the difference of Rs. 50,98,842/- in the gross receipts should not be added to the income returned, the assessee explained that he is the proprietor of M/s R.S. Travels, Prakash Nagar, Begumpet, Hyderabad doing clearing and forwarding agency work. During the relevant previous year, the assessee has done work for various parties and the amount received/receivable are duly accounted for in the books of accounts. It was further contended that reimbursement of expenses amounting to Rs. 82,86,283/- has been spent by the firm on behalf of various customers and the same has been recovered completely from them. Hence these are neither income nor expenses and a few of the parties have deducted TDS on reimbursement of expenses. The Assessing Officer after receiving reply from the assessee further asked him to furnish the details of services rendered to the customers and furnish the details like name and address of the customer, date of incurring the expenditure on behalf of the customer, nature of expenses etc., such as date of reimbursement of expenses, amount reimbursed, mode of reimbursement with details of cheque number and date. He further asked to furnish doc....
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....he Act. From the ledger extracts furnished from Wipro and others, the Assessing Officer observed that the assessee was paid clearing and forwarding charges and nowhere it was mentioned as service charges. The Assessing Officer further noted that the gross receipts as per TDS certificate enclosed with the return of income and gross receipts as per the information received from the clients also differ. On examining the break-up of Rs. 85,33,333 furnished by the assessee, the Assessing Officer observed that the service charges received shown at Rs. 34,34,491/- are only out of gross receipts of Rs. 85,33,333/- as mentioned in the TDS certificate. However, as per the bill book of the assessee, the gross bills from various parties were shown at Rs. 1,20,35,798/- which in other words, would mean that the assessee had not shown service charges for the remaining gross bills of Rs. 34,34,491/-. The CIT (A) after considering the submissions of the assessee vis-a-vis remand report concluded that the customers' in the details submitted had not given bifurcation of the amounts paid to the assessee clearly mentioning what is the amount paid towards reimbursement and what is towards services charg....
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....he assessee relied on the following decisions:- i) CIT Vs. SPL"s Siddhartha Ltd. (345 ITR 223) ii) Ghanshyam K. Khabrani vs. ACIT (346 ITR 443) 7. So far as the merit of the issue relating to the addition of Rs. 50,98,842/- as raised in the remaining grounds, the learned authorised representative for the assessee submitted that the assessee has produced substantial evidence not only before the Assessing Officer but also before the CIT (A) to establish its claim that the differential amount as per TDS certificate relate to reimbursement of expenses on which tax was deducted at source by the customers. Explaining the nature of business activity carried on by the assessee, the learned authorised representative for the assessee submitted that the proprietary concern of the assessee M/s. R.S. Travels is a clearing and forwarding agent. The nature of services provided by the assessee included loading/unloading of import or export goods from the premises of exporter/importer included the following:- a. Loading/unloading of import or export goods from/at the premises of exporter/importer. b. Packing, weighment, measurement of export goods. c. Transportation of the export ....
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....that in spite of sufficient evidence available on record with regard to the assessee's claim of reimbursement of expenses, revenue authorities have rejected such claim on flimsy ground and treated such reimbursement of expenses as income of the assessee. The learned authorised representative for the assessee in support of his contention that the reimbursement of expenses cannot be treated as income of the assessee relied upon a decision of Mumbai Bench of Income-tax Appellate Tribunal in case of ITO vs. Travels & Shopping (P) Ltd.(ITA No.3595/Mum/2011 dated 14-3-2012). 9. The learned Departmental Representative strongly supporting the order of the revenue authorities submitted that the assessee having not raised any ground challenging the legality of proceedings u/s 147 of the Act either before the Assessing Officer or before the first appellate authority, he cannot be permitted to raise such issue for the first time before the Tribunal. In support of such contention, the learned Departmental Representative further submitted that the proceedings u/s 147 of the Act have been initiated on the basis of materials on record, there is clear evidence that the assessee has not shown the....
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.... the view that such contentions is of substance. A perusal of the assessment order as well as the remand report submitted by the Assessing Officer during the first appellate proceedings clearly reveals the fact that the assessment was reopened only due to the difference between the gross receipts shown in the TDS certificate submitted with the return of income and disclosed by the assessee in the profit and loss a/c. There was no other fresh tangible material before the Assessing Officer apart from the TDS certificates submitted with the return for forming a belief that income has escaped assessment. In our view, the assessment could not have been reopened only on the basis of difference in the TDS certificate and receipts shown in the P & L A/c. The Income-tax Appellate Tribunal, Kolkata Bench in case of Mehera Reid & co. Vs. ITO, 81 DTR (Cal.Trib.) 376 held as under:- "In the instant case, assessment has been reopened on the ground that there is discrepancy between professional income declared by the assessee and the professional income as per TDS certificates and that it requires verification to find out whether any taxable income has escaped assessment - There is nothing in ....
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....learing the goods and subsequently these expenditures are reimbursed to the assessee. In fact, ledger account of the assessee in the books of accounts of the concerned parties was also produced for verification. A perusal of the order of the CIT (A) also reveal that the CIT (A) does not dispute the fact that the assessee has incurred expenditure as a clearing and forwarding agent on behalf of his clients. However, by merely observing that no bifurcation of the receipts have been submitted, the CIT (A) has rejected the claim of the assessee when the assessee's claim of incurring of expenditure has been confirmed by the respective clients and necessary evidence in this regard has been produced, in our view, the CIT (A) was not justified in rejecting such claim by simply saying, 'no bifurcation is available'. When the ledger account of the assessee in the books of accounts of the concerned parties has been furnished, the nature of expenditure incurred could have easily been ascertained by the CIT (A) from such account. In aforesaid view of the matter, we do not find any valid reason to reject the claim of the assessee. It is also a fact, that the Assessing Officer has not brough....