TaxTMI 
TaxTMI 
2021 (1) TMI 952
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....ee has filed return of income showing total income of Rs. 14,25,310/-. The case was selected for limited scrutiny through CASS and the reason for scrutiny selection was whether the cash in hand shown in return of income is correct. According to AO, the tax consultant of assessee appeared before him and furnished the month wise total sales- cash & credit and total cash received from the debtors along with cash book for FY 2015-16 (AY 2016-17). Thereafter, the AO notes that on perusal of the total sales, it was seen that total sale shown was at Rs. 3,29,71,270/- but total sale as per trading account of the audited accounts at Rs. 2,91,86,347/-. According to AO, during the course of hearing, the A/R of the assessee was asked to explain the dif....
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....the cash flow statement, which led to the misunderstanding and led to the addition of Rs. 17,57,341/-. However, during the appellate proceedings, this mistake was corrected/reconciled; and reconciliation was filed before the Ld. CIT(A) which has been reproduced by the Ld. CIT(A) at page 5, 6 & 7 of the impugned order. However, according to Ld. CIT(A), the reconciliation was an afterthought and therefore he did not admit the reconciliation and was pleased to confirm the action of the AO. The Ld. A.R of the assessee Shri S.P. Bhati assailing the action of the AO and the Ld. CIT(A) submitted that the assessee is a dealer of washing machine, fridge, UPS etc. According to Ld. A.R, the assessee's accounts are duly audited and when the AO aske....
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.... will tally with the figures Rs. 2,72,68,815.48 as shown in the sales statement. Thus, according to Ld. A.R, there is no difference but only mistake in creating the accounts in the software tally. Further according to Ld. A.R, the books of accounts are audited and the AO has gone through the books of account as well as cash book and since no defect could be pointed out, the addition was not warranted in the light of reconciliation. According to Ld. A.R, from the reconciliation summary filed by the assessee before the Ld. CIT(A) [Page 7 of Ld. CIT(A)], the following facts can be noted: Total receipts from Sundry Debtors 69,92,779.00 Total Cash Sales 2,52,99,009.87 Outstanding Debtors as at 31.03.16 (as per assessment order) ....
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....ugh the correctness of reconciliation summary filed by the assessee and has simply termed it as an afterthought and has confirmed the decision of the AO, which action of the Ld. CIT(A) cannot be countenanced. It is noted that pursuant to the AO's direction, the assessee had filed the cash flow statement which Ld. CIT(A) reproduced at page 5 of his impugned order. According to the assessee, though the accounts were maintained correctly in tally system, however due to wrong classification of the entries made by the accountant while entering the same certain mix-up happened like sale in cash were wrongly classified under the credit sales etc. Realizing this mistake which crept in to the cash flow statement filed at the assessment stage, th....