TaxTMI 
TaxTMI 
2017 (2) TMI 326
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....which the only effective issue is that whether the CIT-A justified in confirming the addition of Rs. 3,70,244/- treating the same as undisclosed current asset on account of outstanding balance receivable being not reflected the same in the balance sheet as on 31-03-06 in the facts and circumstances of the case. 3. The assessee is an individual and engaged in the business of contract work. The assessee filed his return of income on 20-09-2006 declaring total income at Rs. 2,04,640/-. Under scrutiny, notices u/s. 143(2) and 142(1) of the Act were issued. In response to which, the ld.AR of assessee appeared and advanced his submission in support of the return of income. Accordingly, the then AO having jurisdiction i.e ITO, Ward 1(1), Durgap....
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....a plea that he maintains his accounts on the basis of actual payment and credit as per TDS certificates. But, however, according to AO, the assessee should have accounted the said amount in the balance sheet as per the mercantile system of accounting and for not recording the same, the AO added the said amount of Rs. 3,70,244/- to the total income of assessee. 5. The assessee challenged the same before the CIT-A. Before him the assessee filed the bills raised for the work and the details of TDS for the year under consideration and contended that the assessee raised the bills worth of Rs. 1,33,52,210/- on M/s. Simplex Infrastructure Ltd. The said concern paid only Rs. 1,29,81,966, but deducted tax on whole amount of Rs. 1,33,52,210/-. The....
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....itted that accounting practice is not relevant while computing income under the income tax law and that principle of accountancy cannot override the provisions of Tax Statutes and placed reliance on the interpretation rendered by the Hon'ble Supreme Court in the case of Tuticorn Alkali Chemicals & Fertilizers Ltd vs CIT reported in 227 ITR 172 (SC) that the question has to be decided according to the principles of law and not in accordance with accountancy practice and urged to delete the addition of Rs. 3,70,240/- as made by the Assessing Officer. 10. The CIT-A found the assessee filed some documents as directed by the Tribunal during the appellate stage and sought remand report from the Assessing Officer vide this office letter No. CIT....
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....eceivable in the Balance Sheet in the assets side and the relevant portion of which is reproduced herein below: After perusal of the assessment order, remand report and submission of the appellant and its rejoinder. These are facts that the amount outstanding in the name of the Simplex Infrastructures Limited is not reflected in the balance sheet. The argument of the appellant that this amount is offered already and this is double Taxation. This is not correct because this matter is not double taxation. The appellant concealed the income by not showing the receivable balance in the Balance Sheet in the assets side. Assets side of the balance sheet shown lesser to the tune of Rs. 3,70,240/- due to not showing the outstanding balance of Si....
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.... amount was included in the gross receipts in remand report as well as in assessment proceedings as conducted and passed order u/s. 254/143(3) of the Act. We find that the impugned amount of Rs. 3,70,244/- remained as unpaid as on 31-03-2006 as the Simplex Infrastructures Limited to whom the Assessee rendered services retained the same as retention money for realization of liquidated damages, if any, for the work executed by the Assessee and according to Assessee, the realization of the amount was uncertain and that was the reason, he did not show the amount as receivable in the Balance Sheet. It is pertinent to note that the Simplex Infrastructures Limited deducted tax on the total amount as required to be paid to the Assessee and a letter....