AI Drafter 
TaxTMI 
TaxTMI 
2021 (4) TMI 677
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....ion of Ld. CIT(A) in deleting the addition of Rs. 2,14,35,593/-/ and the assessee by preferring cross objection is against the action of Ld. CIT(A) in estimating the net profit at 11.17% to match the TDS vis-à-vis additional turnover estimated by the AO, when according to assessee the net profit it had disclosed on its turn over from the same source which was accepted by both the Ld. CIT(A) & AO is at the tune of 1.22%. 3. Brief facts of this case as noted by the AO are that the assessee firm was engaged in the business of handling, maintaining, cleaning of aircrafts etc. The AO noted that the main business of the assessee firm was with M/s Kingfisher Airlines Ltd. The AO noted that the assessee has rendered such services to M/s S....
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....o furnished some copies of the communications it had with the Airlines showing transfer of business and other related matters. However, according to AO the assessee delayed in submitting details during the assessment proceedings and only started appearing before him on 29.11.2011 and therefore he did not get any opportunity to cross-verify the veracity of the claim. Therefore, the AO concluded that "in the circumstances, as extremely evident from an authentic source such as Form No. 26AS the amount of Rs. 2,14,35,593/- is considered to have been kept concealed by the assessee thus added to the total income" and thereafter he made an addition of Rs. 2,14,35,593/-. 4. Aggrieved the assessee preferred an appeal before the Ld. CIT(A) who was....
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....ormation filed by the payees/M/s Kingfisher Airlines in Form 26AS and that the ground handling business was taken over by M/s Star Consortium Aviation Services Pvt. Ltd. from the assessee firm on 01.06.2008 onwards; and the said amount (Rs. 2,14,35,593/-) relates to the said company [M/s Star Consortium Aviation Services Pvt. Ltd.] for rendering service to M/s Kingfisher. And it was pointed out to the AO that the assessee had received from M/s Kingfisher Airlines the amount for aircraft cleaning charges only and other remittance must be wrongly shown as remitted to the assessee in the Form 26AS, whereas it must have been paid by M/s Kingfisher as the ground handling charges paid to M/s Star Consortium Aviation Services Pvt. Ltd.. In order t....
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.... only on 07.12.2011 and the assessee replied to AO on 13.12.2011, that i.e. within six (6) days, which is a reasonable period to reply to SCN. And thereafter on 14.12.2011 the AO passed the assessment order. So he cannot blame the assessee for not giving him time to cross-verify the contention/explanation given by the assessee in respect to the mismatch as discussed supra. So we concur with the Ld. CIT(A) on this finding. 6. It is noted that while explaining the mismatch, the assessee has brought to the notice of the AO that even though the assessee firm was engaged in the business of ground handling, maintaining, cleaning of aircrafts etc. from 01.06.2008 onwards, the ground handling business was taken over by the M/s Star Consortium Av....
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.... been rendered by the assessee firm and the relevant bills are not claimed to have been raised by the assessee firm on the Airlines. Having brought these information to the notice of the AO and since the assessee was able to prove that the business of ground handling services was transferred to M/s Star consortium Aviation Services Pvt. Ltd. from 01.06.2008 onwards; and there was a goof up in the office of TDS deductor (Kingfisher Airlines) while they were filling up 26AS by wrongly entering the PAN, according to Ld. CIT(A) the AO was duty bound to verify the veracity of the claim since the assessee has placed enough material before the AO to support its contention/explanation in respect of mismatch of Rs. 2.14 crores which assessee firm de....
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....n of Rs. 2.14 crores. Thereafter the Ld. CIT(A) estimated the income of the assessee, which according to him should be net profit (NP) of 11.17% of Rs. 2,14,35,593/- (difference figure); and against this action of Ld. CIT(A), the assessee is before us contending that even if addition is made, the NP should be only 1.22% since the assessee has shown NP on its turnover of Rs. 3,31,50,625/- which has been accepted by the AO as well as Ld. CIT(A). We note that only because there is a mismatch between TDS certificate (26AS) and turnover shown by the assessee in its P& L account cannot be the sole basis on which the entire addition of the difference could have been brought to tax. Therefore, on the facts and circumstances discussed above we find ....