TaxTMI 
TaxTMI 
2025 (10) TMI 204
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....ome, arbitrarily. 1.1 That, the Id. CIT(A) has further erred in confirming the addition made by Id.AO by not appreciating the submission made and evidences adduced by assessee. Appellant prays that specific request was made by assessee that an opportunity of personal hearing may be provided prior to passing the order, however appeal was decided without considering such request which is against the principle of natural justice and order so passed deserve to be quashed. 1.2 That, the Id. CIT(A) has further erred in conforming the addition of Rs. 1,37,53,473/- made by ld. AO by completely brushing aside the fact that assessee is regularly maintaining books of accounts on "Cash method of accounting" (which are also subject to audit), as against which some of his clients follow "Mercantile method of accounting", which has resulted in deviation in receipts as per books and as per Form 26AS. Appellant prays that the receipts declared by assessee are in consonance with method of accounting regularly followed, thus addition so confirmed deserves to be deleted. 1.3. That, Id.CIT(A) has further erred in not appreciating that in some cases, tax has been erroneously d....
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..... Therefore, vide notice dated 01.10.2019, the assessee was requested to submit reconciliation of income as per ITR and 26AS statement. 3.2 Ld. AO based on the submission noted that the assessee declared his income short by Rs. 30,73,552/-. Therefore, pursuant to that observation ld. AO issued a show cause notice to the assessee on 08.12.2019 asking him to show cause as to why an addition of Rs. 30,73,552/- under the appropriate provisions of the Act should not be made to his total income for the year under consideration. The assessee submitted his reply on 13.12.2019 thereby contending that the receipts to the tune of Rs. 1,37,53,473/- (Rs. 30,73,552/-) was only net balance of debit and credit entries) were not declared by the assessee in his ITR. The reply filed by the assessee has been considered carefully but found not acceptable by the ld. AO on account of the following reasons: 1. The assessee has submitted that some payments have been received in subsequent years but as of now the assessee has not submitted any documentary evidence which proves that the payments were offered to tax in the year in which it received. 2. In some cases, the person submits th....
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....rounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below: "5. FINDINGS & DECISION 5.1 I have gone through the assessment order and grounds of appeal. The officer has carried out addition on account of receipts appearing in the 26 AS and the receipts shown under income tax return. Aggrieved Baja assessment order the pilot has failed appeal with multiple grounds of appeal which are disposed off as under: 5.2 As per the assessment order the Ld.AO observed that that receipts shown in ITS data are more than the receipts declared by the assessee in his income tax return filed for the year under consideration. In response thereto, the assessee furnished reconciliation and as per said reconciliation statement the appellant had declared his income short by Rs. 30,73,552/-. On further study of the case the officer found that there are few parties who have shown amount paid to the appellant and TDS was also deposited in favour of the appellant but the appellant has not shown entire income earned from said parties and accordingly the Ld.AO carried out addition of Rs. 1,37,53,473/-. Following is the snapshot of said difference. Name of Pa....
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....18 and declared revised professional receipts of Rs. 8,56,31,300/-. 5.5 The appellant also filed party wise explanation pertaining to alleged parties mentioned above which is summarized hereunder along with finding thereto. Name of Party Amount of difference Explanation provided by the appellant Finding of office of CIT(A) Raghvan Sasi Prabhu 3,39,417 amount of Rs. 3,30,000/- was received in immediately next year. Appellant furnished confirmation from the party. The appellant also contested that, he has considered the said amount in subsequent year. The appellant has not filed any evidence to sow case that amount received in subsequent year is offered to tax. Therefore, the contention of the appellant is not verifiable Address Home Retail Private Limited 80,600 appellant submitted that he has neither given any services nor raised any bill on M/s Address Home Retail Private Limited The appellant merely filed confirmation from the party that he has not provided any services. But he failed to prove that TDS of said party was reversed and the same is not being utilised by the appellant. East West Pipeline Limited 24,74,400 The....
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.... - 550000.00 55000.00 55000.00 4 194J 10-Mar-2017 F 03-Jun-2017 - 370000.00 37000.00 37000.00 5 194J 01-Mar-2017 F 03-Jun-2017 - 550000.00 55000.00 55000.00 6 194J 28-Fcb-2017 F 03-Jun-2017 - 738525.00 73853.00 73853.00 7 194J 02-Feb-2017 F 03-Jun-2017 - 550000.00 55000.00 55000.00 8 194J 02-Feb-2017 F 03-Jun-2017 - 550000.00 55000.00 55000.00 9 194J 02-Feb-2017 F 03-Jun-2017 - 550000.00 55000.00 55000.00 10 194J 02-Feb-2017 F 03-Jun-2017 - 550000.00 55000.00 55000.00 11 194J 02-Fcb-2017 F 03-Jun-2017 - 75000.00 7500.00 7500.00 12 194J 02-Feb-2017 F 03-Jun-2017 - 645000.00 64500.00 64500.00 13 194J 02-Fcb-2017 F 03-Jun-2017 - 550000.00 55000.00 55000.00 14 194J 02-Feb-2017 F 03-Jun-2017 - 815000.00 81500.00 81500.00 15 194J 02-Feb-2017 F 03-Jun-2017 - 665000.00 66500.00 66500.00 16 194J 02-Fcb-2017 F 03-Jun-2017 - 550000.00 55000....
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....the Ld. AO is liable to be upheld. 5.9 Accordingly, the appeal of the appellant is disposed on merits and based on information/documents available on records." 5. Aggrieved from the above finding so recorded by ld. CIT(A) the assessee preferred the present appeal on the ground as stated herein above. Against those grounds so raised by the assessee, the ld. AR of the assessee, filed the written submissions which is reproduced herein below: "Brief facts of the case are that assessee is an individual and is a Senior Advocate representing his clients before the hon'ble Supreme Court of India as well as before various high courts and had also worked as Additional Solicitor General of India till May 2014. The Appellant earns income from his legal profession and from investments made out of own funds. The assessee maintains regular books of accounts following cash method of accounting, which are duly audited by qualified chartered accountant. This fact has also been acknowledged by the ld. AO as it is a matter of record that the assessee follows cash method of accounting in preceding years as well as in subsequent years where such method was duly accepted by the r....
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....e the Hon'ble bench against order passed by Id. CIT(A). With this background, groundwise submission is made as under: Ground of Appeal No.1 to 1.4: In all these grounds of Appeal, assessee has challenged the action of Id. CIT(A) in confirming the addition made by ld. AO of Rs. 1,37,53,473/- on allegation of difference in receipts as per form 26AS and as shown in return of income as made by ld.AO. In this regard, as stated above, at the outset it is reiterated that in notice issued u/s 143(2) of the Act dated 27.09.2019 having DIN no. [ITBA/AST/S/143(2)/2019- 20/1018351104(1)] (APB 50-53) issued on the basis of revised return, it was specifically mentioned that the scrutiny for assessment proceedings had been limited to the examination of (i) Increase in TDS in Revised return, (ii) Capital Gain/loss u/s 111A and (iii) Deduction under Chapter VIA. So far as submission made by assesse on issues regarding capital gains/loss u/s 111A and deduction u/c VIA are concerned, the same stood accepted by ld.AO. However, with regards to the issue of increase in TDS return (which was not there in notice u/s 143(2) dated 13.8.2018), it is submitted that Retu....
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....ce is placed on the following: - 193 ITR 321 Radhasoami Satsang v. Commissioner of Income-tax (SC) - 358 ITR 295 CIT V. Excel Industries Ltd. (SC) It is thus submitted that the assessee had rightly recognised revenue in respect of only those professional receipts, which have been actually received during the year under consideration i.e. Assessment year 2017-18. On the other hand, the clients of the assessee having followed mercantile basis of accounting, have accounted for the payments accrued for the period under consideration wholly and deducted tax at source in respect of entire sum, billed against the legal services taken from the assessee. Due to assessee following Cash system of accounting, TDS deducted in respect of payments accrued but not received are carried forward to the subsequent years and the corresponding TDS has been claimed when the payment against them were received. It is thus submitted that assessee has rightly offered professional receipts as per method of accounting regularly followed by assessee. It is further submitted that during the course of assessment proceedings, the assessee furnished various information as sought ....
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....6 parties, - details of receipts shown by assessee in respect of amount received from such parties, - copies of bank statements of assessee evidencing such receipts Such details were furnished by assessee alongwith application u/r 46A to admit the same, which duly substantiated all the receipts, against which additions have been made. However, the same were not considered by the ld.CIT(A), who confirmed the additions made by the ld.AO to be tenable even in the presence of all the requisite documents placed on record. Ld. CIT(A) brushed aside such additional evidences submitted by the assessee, which were crucial in nature and has not commented upon the same. It is a matter of fact that, during the course of first appeal proceedings, hearing was fixed as many as .... times and assessee furnished response to each such notice, wherein it has been very specifically mentioned that assessee has furnished Additional evidences alongwith prayer u/r 46A (APB 142-196). In view of above, it is submitted that there were in fact, procedural irregularities in completion of the assessment proceedings u/s 143(3) of the Act, as well on the part of ld.CIT(A) in con....
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....) 112 ITD 205 (Del) (Trib.) "10. It is clear from above that primary power, rather obligation of the Tribunal, is to dispose of the appeal on merits. The incidental power to remand, is only an exception and should be sparingly used when it is not possible to dispose of the appeal for want of relevant evidence, lack of finding or investigation warranted by the circumstances of the case. Remand in a casual manner and for the sake of remand only or as a short cut, is totally prohibited. Having regard to aforesaid principle, it is necessary to look into records to see whether there is sufficient material on record to dispose of the issue on merit and there is no need to remand the issue to provide a fresh inning to the Revenue." "10. Shrimanta Shankar Academy Vs. ITO, 2(2), (2007) 107 ITD 99 (Gauhati) (Trib.) It is true that remand of a matter is discretionary but such discretion is required to be shown to be exercised in a judicial manner In the case of Saurashtra Packaging (P) Ltd vs CIT (1996) 131 CTR (Guj) 40 (1993) 204 ITR 443 (Guj), their Lordships of Gujarat High Court have observed that where matter can be disposed of by the Tribunal on the basis of material a....
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....ctual difference of Rs. 19,24,400/- which is computed by alleging that sum of Rs. 1,75,64,400/- has been reflected in Form 26AS as against which sum of Rs. 1,56,40,000/- only has been declared in return of Income. Thus there is arithmetical error of Rs. 5,50,000/- in the order of ld. AO which should be deleted outrightly. Beside this difference of Rs. 19,24,400/- is on account of fact that TDS of Rs. 1,92,441/- has been deducted on sum of Rs. 19,24,400/- on provisional basis, and same is not included in the receipts by assessee since assessee follow cash basis of accounting and same has not been received by the assessee in the year under consideration. Further assessee in support of his claim enclosed the confirmation of M/s East West Pipeline Private Limited (APB 191), wherein it is clearly mentioned that TDS of Rs. 1,92,441/- has been deducted on provision basis. Thus there is no difference in amount declared by assessee and as per 26AS. With regards to balance difference, i.e. Rs. 1,08,59,056/- pertaining to Rosmerta Group, it is submitted that Rosmerta is a well known and established group. The flagship company is Rosmerta Technologies Ltd. And it has various group and....
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....owledgement and Computation of return of income filed u/s 139(1). 01-07 2. Copy of Acknowledgement and Computation of Revised return of income 08-14 3. Copy of Audited Financial statements along with Tax Audit Report. 15-35 4. Copy of Form 26AS 36-42 5. Copy of Notice issued u/s 143(2) of the Income Tax Act dated 13.08.2018. 43-46 6. Copy of Notice issued u/s 142(1) of the Income Tax Act dated 28.06.2019 47-49 7. Copy of Notice issued u/s 143(2) of the Income Tax Act dated 27.09.2019. 50-53 8. Copy of Notice issued u/s 142(1) of the Income Tax Act dated 01.10.2019 54-56 9. Copy of Reply filed before Ld. AO during the Assessment proceedings dated 10.10.2019 57-59 10. Copy of Notice issued u/s 142(1) of the Income Tax Act dated 24.10.2019 60-64 11. Copy of Reply filed before Ld. AO during the Assessment proceedings dated 15.11.2019 65-69 12. Copy of Reply filed before Ld. AO during the Assessment proceedings dated 03.12.2019 70-76 13. Copy of Notice issued u/s 142(1) of the Income Tax Act dated 08.12.2019 77-78 14. Copy of Reply filed before Ld. AO during the Assessmen....
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....al 1,37,53,473.00 Explanation for entries appearing at S.No. 2, 3 & 4 of AO's order at page 5 on the basis of which addition has been made Name of entities of Rosmerta Group appearing at page 7 of the Assessment order S. No. S.No. of first table (as per AO page 5) Name of the Group Company Amount paid by these companies to assessee in A.Y. 2017-18 as per their respective books of accounts Amount received by assessee in A.Y. 2017- 18 from these companies as per assessee's books 1 Link Autotech Private Limited 3,58,500.00 3,58,500.00 2 2 Rosmerta Autotech Private Limited 82,43,900.00 49,30,000.00 3 Rosmerta Technologies Ltd 2,34,000.00 90,60,425.00 4 3 Rosmerta HSRP Ventures Private Ltd 55,12,525.00 - 5 4 Rosmerta Safety Systems P. Ltd. 11,79,500.00 11,79,500.00 Total 1,55,28,425.00 1,55,28,425.00 Accordingly parties at S. No. 2, 3 & 4 has paid the amount which has been duly recorded and offered for tax in the return of income however, the Ao in the assessment order has ignored the positive amount and has made the addition. Wri....
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....S credit requested the explanations from the assessee is required and the verification as to the claim of the assessee for TDS claim vis a vis receipt offered required in depth verification so there is no merit in the appeal so filed by the assessee and lower authority has already considered the all the arguments of the assessee. Considering that fact on record the appeal filed by the assessee is required to be dismissed. 9. In the rejoinder the ld. AR of the assessee submitted that question of mentioning sundry debtors and writing of bad debts will arise only in those cases where the assessee follows mercantile system of accounting whereas in this case, the assessee regularly follows the cash system of accounting. Therefore, there is no merit in the contention so mentioned in the order of ld. Assessing Officer and based on the reconciliation chart submitted above the credit of TDS and addition so made is required to be deleted, as merely solely because of Form no. 26AS no addition can be made. 10. We have heard the rival contentions and perused the material placed on record. The bench noted that the assessee has raised ground no. 1 to 1.4 all relates to the addition of Rs. 1....
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....ly been reflected and due that mistake on their part it was reflected in Form no. 26AS. Looking that aspect of the matter merely the TDS deducted and thereby without assessee raising any service to the said company there cannot be addition in the hands of the assessee merely on account of the entry appearing in the Form no. 26AS and even other wise the assessee filed the details at page 197 to support his contention. Therefore, we direct the ld. AO to delete that addition so made for an amount of Rs. 80,600/-. The third item addition of difference in respect of East West Pipeline Limited. The assessee referring to page 191 being the ledger account of the assessee from the books of that company. The last entry reported by that company shows TDS of Rs. 1,92,441/- the amount of the provision on this amount relates to Rs. 11,85,875/- and Rs. 7,38,525/- [total Rs. 19,24,400 and TDS Rs. 1,92,441/-] as per Form no. 26AS. While going through the page 191 filed we note that East West Pipeline Limited made the provision of the amount payable by that company and the assessee following the cash system of accounting that provision made by East West Pipeline Limited cannot be considered as in....