TaxTMI 
TaxTMI 
2014 (10) TMI 322
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....al. 2 Vide Ground No. 1, the grievance of the 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 ....
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....ars apparent mistake in the computation of turnover as taken in the order and as revealed by the RSMM 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. &nb....
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....sponse to notice u/s. 133(6) of the I. T. Act, further approve and vindicate the material already available on record. The pointwise reconciliation on 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 m....
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..../- and the same payment was confirmed vide letter dated 07/12/2012. The Assessing Officer reported that the total payment made by M/s. RSMM Ltd., Jaiselmar & 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 servic....
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....bsp; 1. At serial no. 1 the amount of turnover as declared by the appellant in the return is appearing which is Rs. 70139546/. 2. At serial no. 2 amount of service tax of Rs. 5004040/- is mentioned. This amount is as per working submitted by the Id. AO in his remand report at page 2 and the working submitted 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 ....
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....he remand report of the AO as also the submission made by the appellant in respect of such remand report including the reconciliation chart furnished by the appellant. It may be noted that in original order of assessment the total turnover as per TDS certificate issued by M/s RSMM Ltd. (Bikaner and Jaiselmar Unit} was determined at Rs. 78838504/- by the AO and the turnover shown 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....
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....he RSMM Ltd. as also of the AO. Therefore the turnover reported by M/s RSMM Ltd. Jaisalmer on account of such amount of service tax needs to be reduced so as to match with the appellant's turnover TDS whereas not considered by assessee (Jaisalmer) (As informed by the principal in remand proc.) 5004040 3. Add: Amount for which bills were raised by On verification it is noted that the two bills for Rs. 3210709/- and 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 tw....
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....y Rs. 41476/-. As regards items of Sr. No. 6, 7 & 8 for Rs. 5788353, Rs. 177984 & Rs. 265102/- which is noted that such amount have been shown as receipts/ turnover by the appellant during A.Y. under consideration and specific reasons as to why such amount are treated as business receipts/ turnover has been furnished by the appellant during the appellant proceedings. However M/s RSMM Ltd. have not accounted for treated such amount as turnover/ receipts pertaining to A.Y. 09-10. However keeping in view the fact that such amount 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....
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.... view the above facts the turnover as declared by the assessee is to be increased by Rs. 41476/-. Therefore addition to the extent of Rs. 41476/- is confirmed. The appellant accordingly gets relief of Rs. 8657482/-." Now the Department is in appeal. 7. Learned D.R. strongly supported the order of the Assessing Officer and further submitted that the assessee did not file any reconciliation before the Assessing Officer and wrongly claimed that M/s. RSMM Ltd. was maintaining the books of accounts on cash basis whereas the audit report of the said company revealed that books of accounts were maintained on mercantile basis. Therefore, the difference in the receipt as per TDS certificate and as recorded in the books of accounts of the assessee was rightly treated by the Assessing Officer as concealed income of the assessee and added to its income. It was further stated that the Ld. CIT(A) was not justified in allowing the relief to the assessee. 8. In his rival 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....
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....he next issue vide Ground No. 2 relates to the deletion of addition of Rs. 1,50,000/- made by the Assessing Officer on account of disallowance out of miscellaneous expenses. 11. Facts relating to this issue, in brief, are that the Assessing Officer during the course of assessment proceedings, noticed that the assessee had debited operating expenses amounting to Rs. 56,10,000/- and an amount of Rs. 67,01,636/- under the head crushing & labour charges. According to the Assessing Officer, those expenses were paid and claimed on the basis of self made vouchers. Therefore, authenticity of those expenses could not be fully relied upon. The Assessing Officer made an adhoc disallowance of Rs. 1,50,000/-. 12. Being aggrieved, the assessee carried the matter to the ld. CIT(A) and submitted that the addition had been made on the basis of assumptions and presumptions basis. It was stated that the assessee maintained regular books of accounts together with supporting documentary evidences and all the receipts / payments were fully vouched. It was explained that the area of operation and work involved was also largely dealing in uneducated, illiterate persons belonging to rural areas. Ther....