TaxTMI 
TaxTMI 
2022 (8) TMI 513
X X X X Extracts X X X X
X X X X Extracts X X X X
....year tantamounted to double addition, but the application not being considered for a considerable time by the AO the assessee filed appeal thereafter to the ITAT delayed by 63 days. An affidavit of the assessee stating the above on oath was filed before us. 3. Ld.DR objected to the condonation of delay. 4. We have heard both the parties. We have noted that the assessee has demonstrated reasonable and bonafide cause for the delay in filing the appeal before us. Considering the same and also noting the small period of delay, we condone the same. Order was pronounced during the course of hearing and the appeal proceeded to be heard with thereafter. 5. Grounds raised by the assessee in appeal are as follow: "1.1 The order passed u/s.250 on 23.11.2017 for A.Y.2014-15 by CIT(A)- 3, Abad, confirming the addition of Rs.25,24,873/- towards alleged short receipts is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the explanations furnished and the evidence produced by the appellant. 2.1 The Id. CIT(A) has grievously erred in law and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....this amount as work-in-progress (WIP) and reflected sales on account of the same in the succeeding year while in the case of other party i.e Concord Biotech Ltd., an amount of Rs.10,15,775/- had been booked as WIP in the impugned year while remaining amount out of total difference of Rs.21,93,645/- had been booked as sales in the succeeding year. It was explained that this difference in the accounting of the sales by the assessee and the other party was on account of the fact that the bills raised by the assessee were sent to the other party who only after going through various items, for which bill was raised and after noting, whether the work was satisfactorily completed and measuring everything and finding everything to be 'okay' would pass the bill , which would not be necessarily for the same amount, as that for which it was raised, and as a consequence, though the work was completed in the impugned year and bill was also raised by the assessee in the impugned year, since the other party had accepted the bill in the subsequent year, the assessee had booked this bill in subsequent year. The ld.counsel for the assessee pointed out that with respect to both the parties necessary ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ertification by Applewood Estate Ltd. The appellant vide submission dated 21.11.2017 stated that this amount was not booked in work-in-progress, therefore, conflicting submissions on the record but none explaining the discrepancy pointed by the AO. It appears that the amount is being claimed by revising the figure of WIP stock by passing JD entry as provision against the sates which have been booked on or before 31.03.2014. As regards discrepancy in 26AS with respect to Concord Biotech Ltd of Rs.21,93,645/- the appellant submitted that there are receipts as per Form no. 26AS of Rs. 1,41,12,536/-- whereas it was Rs.1,19,18,891/- as per books. It was submitted that the payment certificate was not finalized due to some disputes regarding quantum of work completed by the agent and some portion has been accounted in WIP. The appellant submitted that the amount which has not been accounted as work in progress, has been accounted for that differential receipts as income in A.Y. 2016-16 as evident the ledger account for F.Y.2014-15 wherein the entries on 05,06.2014 and 01,07.2014 pertaining to RA Bill No. 1-6-8. The appellant submitted copy of return for A.Y.2015-16 and detailed l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d also explained the reason for doing so, and substantiated the same also with the copy of ledger account of the parties. The ld.CIT(A), we find, has rejected the explanation, primarily for the reason that since the assessee followed the accrual method of accounting, and the job was completed and bill raised by the assessee, the corresponding sales should have been booked in the impugned year only. We do not find any merit in this logic of the ld.CIT(A). Even as per the accrual system of accounting, the income is said to have been accrued only when the other party accepts its liability with respect to the bills raised on it. Until then no income is said to be accrued. Even going by the logic of the ld.CIT(A) we find that the assessee had rightly booked income on account of bills which he had demonstrated, were accepted by the CONCORD Biotech Ltd. in the subsequent year. This, income accrued to the assessee in the subsequent year only when the bills were passed and accepted by the CONCORD Biotech Ltd.. With regard to these bills, therefore, the assessee had rightly booked the amounts in the subsequent year, and no addition was called for to be made to the income of the assessee in r....