TaxTMI 
TaxTMI 
2014 (10) TMI 322
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....Department relates to the deletion of addition of Rs. 86,98,958/- made by the Assessing Officer on account of difference in gross receipts as per TDS certificate vis-à-vis as per books of accounts. 3. Facts relating to this issue, in brief, are that the assessee is a cooperative society in which 56 members are involved and it is engaged in transportation, mining, excavation business. The assessee had taken contracts from big companies like Rajasthan State Mines Minerals Ltd. (RSMM Ltd., in short). The payments are released by these companies after deducting tax at source. During the course of assessment proceedings, the Assessing Officer noticed that the gross receipts as per TDS certificate issued by the RSMM Ltd. was at Rs. 7,88,38,504/- while in the books of accounts the amount entered was Rs. 7,01,39,564/- and there was a difference of Rs. 8698,958/-. According to the Assessing Officer, the assessee failed to give satisfactory explanation in this respect. He, therefore, made the addition of Rs. 86,98,958/-. 4. Being aggrieved, the assessee carried the matter to the ld. CIT(A) and the submissions made as incorporated in para 6.3 of the impugned order were as under:- &n....
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.... Ltd., Jaisalmer and Bikaner vide their responses to notices u/s. 133 (6) of I. T. Act. The receipt as per the material available on record is eventually Rs. 6,75,46,608/- as against Rs. 7,88,38,504/- considered in the order. It was submitted during the course of assessment proceeding and reiterated now that the assessee observed mercantile system and the Govt./ Semi Govt, department i.e. RSMM Ltd. follows cash system of accounting. It accounts for the last bills pertaining to A.Y. 2009-10 in the subsequent A.Y. 2010-11 since the payment for same is made by it in that year only. Whereas the RSMM Ltd. considered the payments pertaining to A.Y. 2008-09 as receipts of A.Y. 2009-10 but the assessee in line with the mercantile system of accounting followed, considered the same as income in A.Y. 2008-09. This fact can be gauged even from the material already available on record. In view of the foregoing some adjustment needs to be made for reconciliation of receipts as per RSMM Ltd. and as per financial statements. Receipt as per the responses u/s. 133 (6) of I. T. Act Less: Bills raised by the assessee in A. Y. 20....
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.... the basis of response of the RSMM Ltd., Jaisalmer & Bikaner is contained in the preceding reply. It was held in the case of ITO vs. Ham Road Carriers (P) Ltd. (2011) 140 TTJ (Ahd.) 642 SS. 4 & 5 that an income of a taxpayer is not required to be computed merely with reference to the TDS certificate but assessment of an income is altogether an independent exercise. With which was certified on the TDS certificate could or could not have been subjected to tax in the hands of the assessee recipient. The deductor had chosen a safe procedure of deduction of tax on the entire amount of freight. Otherwise the freight was to be paid to the truck owners and not to the assessee company, who is only a conduit in arranging the hiring of the truck. The freight was to be passed on to the truck owners, therefore, the freight was not subject to tax in the hands of the assessee. Nevertheless, accounts of the assessee have also demonstrated the same. With the result, the amount on which TDS was deducted had not matched with the figures of the income disclosed by the assessee in respect of those transactions. Addition on account of difference in truck hire charge....
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....& Binaker arrived at Rs. 7,35,94,842/-. As regards to the contention of the assessee that M/s. RSMM Ltd. was maintaining the books of accounts on mercantile basis, the Assessing Officer reported that the audit report of M/s. RSMM Ltd. revealed that the company was maintaining the books of accounts on mercantile basis, therefore, the issue that when bill was issued and when payment was made was not relevant. As regards to the reconciliation of figures the Assessing Officer had reported that the assessee had not made any correspondence in this regard with M/s. RSMM Ltd. and such error was not noticed from the communication received from M/s. RSMM Ltd. Therefore, he did not consider it necessary to make reconciliation of such figures. The report of the Assessing Officer was made available to the assessee, who submitted rejoinder to such report and stated that M/s. RSMM Ltd. had deducted TDS out of the bills of the assessee on payment basis i.e. as and when the payment was made TDS was deducted. It was also stated that TDS on service tax component of the bills was also deducted whereas the same had been accounted for by the assessee separately as the said amount was ultimately remitted....
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....bmitted by RSMM, Jaisalmer also wherein corrected amount of service tax is mentioned at Rs. 5004040/-. 3. At serial no. 3 an amount of Rs. 3597025/- is mentioned which is the amount of bill dated 31.3.2008 (copies enclosed for Rs. 3210710/- & 386315/-). These bill amount were incorporated in the turnover of the assessee for the year ended 31.3.2008 (copy of ledger account for the year 2007-08 has already been submitted evidencing inclusion of above bills in the FY 2007-08). Since RSMM cleared this bill in the FY 2008-09 same has been included by them in the TDS certificate for the FY. 2008-09. 4. At serial no. 4 an amount of Rs. 1044194/- is mentioned which is the amount of service tax on which TDS was deducted by RSMM, Bikaner. Separate working of the same is annexed hereto for this amount. The principal has not considered amount of service tax charge by the appellant in its bills dated 28.7.08 as is apparent from the details of bills as appearing in account statement provided by the principal (appearing at page 10 to 12 in the compilation) and the TDS certificates. 5.....
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....in books of accounts was found to be at Rs. 70139564/-. The AO accordingly determined difference in turnover shown by the assessee amounting to Rs. 8698958/- and the same was added to the total income of the appellant. It may be mentioned that the difference of these two figures is correctly arrives at Rs. 8698940/- whereas the AO appeared to have wrongly mentioned such amount at Rs. 8698958/-. It may also be stated that the AO has collected information from M/s RSMM Ltd. Bikaner and Jaiselmer u/s 133(6) of IT Act and such information was received on 15.12.2011 and 16.12.2011. However subsequently the M/s RSMM Ltd. vide letter dated 15.3.2012 addressed to ACIT, Circle-1, Bikaner admitted & some mistake in reporting of turnover/ TDS. During the appellate proceedings, the appellant also claimed the same facts as to how the turnover was wrongly reported and that such wrong reporting by the principals i.e. M/s RSMM Ltd. has also been brought to the notice of the AO. All these facts and contentions raised by the AO appellant were brought to the notice of the AO and accordingly the AO was required to examine such contentions and submit a factual report accordingly. The AO considered such....
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....386315/- were raised on 31.3.08. The appellant treated such amount as receipt/ turnover and included the same in the total receipt which is verifiable from ledger account of the appellant for A.Y. 08-09. This fact is also verifiable from the balance sheet of the appellant from the relevant period but M/s RSMM Ltd. made payment of such bill in next A.Y. i.e. 09-10, A.Y. under consideration as deducted TDS amount also in A.Y. 09-10 on the basis of deduction of TDS M/s RSMM Ltd. as well as the AO treated such amount as receipt/ turnover of A.Y. 09-10. However perusal of necessary documents and discussed above indicate that the amount was already offered in A.y. 08-09 by the appellant and same amount cannot be taxed twice. Therefore the appellant has rightly not included such amount in respect of A.Y. 09-10. For making reconciliation between the turnover shown by M/s RSMM Ltd. vis-a-vis the appellant in respect of A.Y. 09-10, the amount has to be reduced from the turnover of M/s RSMM Ltd. Assessee during FY 07-08 but considered by 3597025 Principal during this concerned year Bill for April, 08 (appearing in statement filed by ....
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....t are shown as turnover by assessee himself in respect of A.Y. under consideration and such amount are part of the turnover already shown by the appellant in the books of accounts, therefore no adverse inference can be drawn in as much as the turnover already shown by the appellant need not be reduced. In Bill no. 1, 2 & 3 41476 (verifiable from our ledger) 9686735 79826281 6. Less: Bills raised by us during FY 08-09 but Considered by principal in next FY (March 09) 5788353 7. Less: deductions made by principal out of Bills raised by the assessee Bill No. 13, 14, 15, 22 & 23 177984 (verifiable from out ledger) 8. Less: Rate Diff. bills not considered by principal Bill no. 16 to 21 265102 6231439 Amount as per TDS Certificates 73594842 ** the details for column no.4 is as under:- Charges Service Tax Total TDS Ded. On 1. Bill dated 28.05.08 Page 10 of compilation ....
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....al submissions, learned counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the Assessing Officer without considering the reconciliation statement furnished by the assessee, made the addition in an arbitrary manner and the Ld. CIT(A) after considering the facts in right perspective, was fully justified in deleting the arbitrary addition made by the Assessing Officer. 9. We have considered the submissions of both the parties and carefully gone through the material available on record. In the present case, it is an admitted fact that there was a difference in the amount of payments as mentioned in TDS certificate of RSMM Ltd. and the receipts shown in the books of accounts maintained by the assessee. However, the assessee explained the difference through reconciliation statement which was forwarded by the Ld. CIT(A) to the Assessing Officer for his comments. The Assessing Officer in his remand report accepted few mistakes, but did not agreed fully with the explanation of the assessee. He accepted that the amount of Rs. 55,96,199/- was wrongly considered in respect of Rs. 50,04,040/- received from M/s. RSMM Ltd. Similarly, ....