TaxTMI 
TaxTMI 
2023 (10) TMI 1263
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....n deleting the addition on account of difference between income as per financials and income as per Form 26AS without appreciating the fact that the assessee has failed to furnish documentary evidences to substantiate its claim. 3. On the facts and circumstances of the case and in law the CIT(A) erred in not allowing a reasonable opportunity to the AO before taking into account additional evidences in the form of different reconciliation sheet as per rule 46A of I.T. Rules, 1962 without appreciating the fact that in the preceding Assessment Year in the assessee's own case remand report was called for to verify the submission of the assessee on similar issue. 4. On the facts and circumstances of the case and in law the CIT(A) erred in not appreciating the fact that the reconciliation sheet submitted before the CIT(A) was different from that of submitted before the AO during the course of assessment proceedings. 5. The appellant craves leave to amend or alter any ground or add new ground which may be necessary." 2. Briefly stated facts necessary for consideration and adjudication of the issues at hand are : the assessee being an advertising agency fi....
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....,63,251. 5. Difference due to other reasons INR 8,82,939. A copy of Form 26AS for the year under consideration is enclosed herewith as Annexure 4 for your goodself kind reference. For case of reference, the below table captures the reconciliation of difference in Income in Form 26AS vis-à-vis the amount shown in books of accounts for the year:- S. No. Particulars Amount (INR) 1 Income as per profit & loss account 28,08,07,958 2 Add: Difference on account of service tax (Refer Para 2.7 to 2.1 3) 3,33,01,067 3 Less: Difference on account of income during the year under consideration but reflected in Form 26AS of the next year (I.e. AY 2014-15) (Refer Para 2. 16 to 2.25) (1,52,83,936) 4 Add: Difference on account of income offered in ROI of the preceding year (i.e. AY 2012-13) but reflected in Form 26AS of the year. (Refer Para 2. 14 to 2.23) 89,23,743 5 Less: Difference on account of income offered to tax in ROI for the year but not reflected in Form 26AS of the year. (Refer Para 2.24 to 2.25) (33,63,251) 6 Add; Difference due to miscellaneous reasons (Refer para 2.26 to 2.27) ....
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....od, the service tax component is shown separately as a 'liability' in the books of accounts of the payee. In contrast, under an exclusive method of accounting, the service tax component form part of total turnover of the payee and subsequently claimed by the payee as an 'expense' in the Profit and Loss account for the year. Therefore, an under both the methods of accounting, the net impact on the total income would be identical. In view of the above, it is conspicuous that the service tax does not partake the character of "income" for the Appellant, irrespective of the accounting method followed. Accordingly, considering the Customers of the Appellant have inadvertently deducted the tax at source on the service tax portion and such service tax has also been deposited by the Appellant with the exchequer, the Appellant should be: entitled^ claim the credit TDS deducted on the same. In light of the above, it is most respectfully that the difference of INR 3,33,01,067 [referred in (A) above] on account of service tax could not be construed as "Income" of the Appellant for the year and hence, the addition made of account of this difference is palpably u....
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....13), the Appellant has claimed the TDS credit for said income during the year under consideration by relying on the principles enunciated by Hon'ble Delhi Tribunal (supra). In view of the above, it is most respectfully submitted that differences mentioned in (B) and (C)above represents the timing difference of income offered by the Appellant during the year in its books of accounts vis-a-vis the amount of income shown in Form 26AS for the year under consideration and the corresponding TDS on the amount of Income [referred in (C) above] has been claimed by the Appellant during the year under consideration in accordance with the provisions of section 199 of the Act read with Rule 37BA of the Rules. Difference of INR 33,63,251 on account of Income offered to tax in ROI for the year but not reflected in Form 26AS of the year. With regard to the above, it is humbly submitted that the Appellant had earned an income of INR 33,63,251 through export of services during the year under consideration which was offered to tax by the Appellant in ROI for the year. However, since such income was not subjected to TDS, this income did not reflect in Form 26AS for year ....
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.... the present AY 2012-13 but receipts are reflected in Form 26AS of AY 2014-14. Similarly, the assessee has filed evidence regarding his claim that Rs 89,23,743 is income offered in AY 2012-13 but reflected in Form 26AS of this year. The discrepancies to the extent of Rs. 1,52,83,936 & Rs. 89,23,743 are therefore duly explained. (iii) The assessee has also claimed that a sum of Rs. 33,63,251 which is income offered during the year but not reflected in Form 26AS as there was no TDS made on these receipts by the payees, as these were for export of .services. As this amount was received in foreign currency without deduction of tax, the same did not appear in Form 26AS, but was duly accounted as income in the books. The explanation of the assessee reproduced above on these two issues is self-explanatory and therefore this reconciliation is in order. (iv) Lastly, the assessee has pointed out that there was a difference of Rs. 8,82,939 which is on account of provisions for expenses created by his clients as well as reimbursement made to him on which TDS has been deducted. In this regard also, the submissions of the assessee are self-explanatory. 5. After due con....