TaxTMI 
TaxTMI 
2025 (12) TMI 1164
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.... Jurisdiction and therefore bad in law. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in confirming the action of AO in taxing the Professional fees accrued but not received amounting to Rs. 202,968/- as Business/ Profession despite the fact that appellant offers income for Tax on cash basis & income of Rs. 2,02,968/- has not been received by the appellant. 4. On the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in confirming the disallowance of Rs. 1,30,000/- made by the Assessing Officer being deduction claimed under chapter VI A of the IT. Act." 2. Briefly stated facts of the case are that the assessee has filed his original return of income on 28-11-2014, which was the subject matter of scrutiny assessment u/s. 143(3) of the Income Tax Act, 1961 ('the Act'), wherein the returned income was accepted vide order dt. 21-10-2016. Subsequently, basis information that the assessee has offered lesser professional receipts to tax during the year under consideration, notice u/s. 148 of the Act was issued to the assessee. In response to the notice, the assessee did not file the return of income an....
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....e addition of Rs. 2,02,968/-. Thus, addition has been made in excess of Rs. 12,556/-, in view of the appellant's explanation that income has been recognized on cash basis and TDS credit has been claimed corresponding to income recognition and that the balance amount of income has been claimed in next assessment year i.e. A.Y.2015-16. Considering the appellant's submission about disclosure of revenue in subsequent assessment year and also claim of TDS credit in subsequent assessment year, the grounds no. 1, 2 and 3 are disposed off with the direction to the AO to delete the addition to the extent of Rs. 12,556/-and may carry out the verification whether remaining amount is disclosed in subsequent years or not. Technically, the grounds no. 1, 2 and 3 of appeal are allowed." 4. Regarding ground no. 2, the ld AR submitted that the AO has not issued notice u/s. 143(2) and therefore, the whole of the reassessment proceedings u/s. 147 and consequent order so passed by the AO is bad in law and deserve to be set-aside and in support, he has relied on various authorities. 5. The ld Sr. DR submitted that the assessee has not furnished return of income in response to notice u/s. ....
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....me. In addition to the same, as per section 199 of the L.T. Act, I have included the Amount of TDS of Rs. 57,310/- under my Income. Thus my Total Income declared is Rs. 22,13,642/- (Rs. 21,56,332/- + Rs. 57,310/-) on which I have claimed TDS of Rs. 2,40,407/- 4. That as per 26 AS the Total Income reflected is Rs. 25,16,610/- which interalia is generated based on the TDS on the basis of the Provisions made by the Parties deducting the TDS. The Provisions made by such parties do not culminate in to amounts actually paid for which the difference is Rs. 3,02,968/-. 5. I further state that I have been following Cash Basis of accounting regularly and that out of the Rs. 3,02,968/- which is actually on NET basis as explained in the Chart mentioned herein above. 6. From the said chart, your Honours may please appreciate the fact that I have been offering my Income on actual Cash receipt basis, which inter alia is as per accounting provided in section 145(1) of the Income Tax Act, 1961, and in some of the cases as given in chart are more then the amount reflected in 26AS and the Difference between the Two i.e. based on the receipt basis have been offered to Tax in....
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....tainable in the eyes of the law. If the assessee denies that he is in receipt of income from a particular source, it is for the AO to prove that the assessee has received income as the assessee cannot prove the negative. Reliance can be placed in this respect on the decision of the Tribunal in the case of "DCIT vs. Shree G. Selva Kumar" in ITA No.868/Bang/2009 decided on 22.10.10 and another case in the case of "Aarti Raman vs. DCIT in ITA No.245/Bang/2012 decided on 05.10.12. ii. In another similar case M/s. Kroner Investments Limited vs DCIT 5(2) in ITA no. 5125/M/2013 wherein the Ld. AO Made the Addition on the Basis of AIR and confirmed by the LD. CIT(A), the Hon'ble ITAT held that It has been held time and again by this Tribunal that the additions made solely on the basis of AIR information are not sustainable in the eyes of law. iii. That the Hon'ble Supreme court in the case of CIT v/s A. Krishnaswami Mudaliar 53 ITR 122 has drawn a distinction between Cash system of accounting and Mercantile system of accounting as The Hon'ble Apex Court observed as under Among Indian businessmen, as elsewhere, there are current two principle ....
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....(1)." 8. The Ld. DR has been heard, who has relied on the order passed by the AO as well as that of the Ld.CIT(A). 9. We have heard the rival contentions and perused the material available on record. We find merit in the contention advanced by the ld AR that where the assessee, engaged in medicine profession, is following cash basis of accounting his professional receipts and the income has been offered to tax consistently following the cash basis of accounting and there has been no change in the year under consideration, there is no legal and justifiable basis to bring the income to tax which has not been received by the assessee during the financial year relevant to impugned assessment year. We find that both the AO as well as Ld.CIT(A) has not disputed the cash basis of accounting so followed by the assessee. The Ld.AR has drawn our reference to the reconciliation statement between the income offered to tax in the return of income and which has been reflected in Form 26AS and it has been stated at the Bar that the difference reflects the transactions which, though has suffered TDS, however, the same has not been received during the financial year under consideration and th....