TaxTMI 
TaxTMI 
2014 (3) TMI 648
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....years is valid in law. The revenue is assailing the decision of the Ld. CIT(A) in deleting the addition relating to difference between the Operating income disclosed by the assessee and the amount shown in the TDS certificates made by the AO in both the years. 3. The facts relating to both the issues are stated in brief. The assessee is a licensed custom house agent. The assessment in the hands of the assessee for the assessment years 2005-06 and 2006-07 were completed u/s. 143(3) respectively on 17-12-2007 and 12.11.2008. Subsequently, the Assessing officer noticed that the Operating income declared by the assessee in the returns of income was lower than that shown in the TDS certificates relating to the respective years. The details of....
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....the expenses incurred on behalf of the customers, since the reimbursement takes place on actual basis. The assessee submitted that it has duly offered the receipts relating to transport charges and services charges as its income by crediting them to the profit and loss account, as they only constitute its operating income. 3.1 However, the Assessing officer took the view that the assessee has not substantiated the above said explanations with documentary evidences. Accordingly, he rejected the same and assessed the difference amount shown in the tabulation as the income of the assessee in the respective years. 4. Before the Ld. CIT(A), the assessee challenged the re-opening of the assessment for both the years and also the addition ma....
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....hich constitute income in the hands of the assessee are shown in the Profit and Loss account and receipts relating to reimbursement of expenses are shown in the "Expenses receivable account". He submitted that the customers have deducted TDS on the gross amount paid to the assessee, i.e., the service charges plus expenses in accordance with the circular issued by the CBDT. Hence there is a different between the amount shown in the Profit and Loss account (Operating income) and that shown in the TDS certificates. However, if the amount shown in the Profit and Loss account and the amount debited to "Expenses Recoverable account" are clubbed together, there is actually no difference. He submitted that the assessee has also reconciled the same ....
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....duction before the Assessing officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso." In the instant case, the assessee has accounted for the reimbursable expenses incurred by it under the head "Expenses recoverable Account", but the said accounting practice was not examined by the AO during the course of original assessment proceedings. The Ld A.R submitted before us that the assessee had fully accounted all the receipts shown in the TDS certificates in the TDS certificates and hence the reason entertained by the assessing officer was not correct. He further submitt....
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....odology adopted by the assessee to account for the amounts received from the customers. He also submitted that the Ld CIT(A) has properly understood the same and accordingly held that the assessee has accounted for all the receipts. The Ld A.R also submitted that the Ld CIT(A) has called for a remand report from the assessing officer. In the remand report, the assessing officer has only expressed his reservations like possibility of leakage, possibility of inflating expenses etc., without bringing any material on record. Accordingly, the Ld A.R submitted that the Ld CIT(A) has deleted the disallowances after analyzing all the facts relating to the addition made by the AO. 8.1 However, the Ld D.R submitted that the assessee has given only....
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....ns engaged in custom clearing agency business. The ld CIT(A) has also noticed that the expenses incurred on behalf of the customers are debited to a Separate account and the receipts relating thereto are credited to that account. We notice that the assessing officer did not examine the books of account to satisfy himself about the veracity of the said claim put forth by the assessee. The Ld A.R further submitted that the documents relating to the expense shall be delivered to the respective customers, since they are incurred on their behalf and further they claim the same as expenses in their hand. It appears that this practical position in conducting the business has not been appreciated by the AO. Under these circumstances, in our view, t....