TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1214
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....go. The case was selected for the reasons that receipts declared u/s 194C & 194J of the Act are more than the receipts shown in ITR and mis-match in sales turnover reported in audited report and ITR. During assessment proceedings, the AO observed that assessee has gross receipt of Rs. 3,80,90,475/-. However, from the perusal of the financial statement, he observed that assessee has declared turnover of Rs. 2,23,12,103/- only. The assessee was asked to furnish party-wise details of receipt and reconciliation of the difference. In response, assessee has furnished the list of parties from whom it has received amount and the details of TDS deducted. Further he observed that to the extent of gross receipts of Rs. 56,31,716/- wherein no TDS was deducted by the parties. After considering the submissions of the assessee, AO observed that assessee has accepted that gross receipts from the business was of Rs. 4,37,42,768/- out of which TDS of Rs. 7,64,147/- was deducted on an amount of Rs. 3,81,11,052/- and no TDS was deducted on receipt of Rs. 56,31,716/-. Accordingly, the AO disallowed the difference of amount not declared by the assessee to the extent of Rs. 2,14,30,665/- as income of the....
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....eight / forwarding including handling of documents pertaining to cargo. As per the AIR report, appellant has gross receipt of Rs. 3,80,90,475/-. However, from the perusal of the financial statement, it was seen that the appellant has disclosed turnover of Rs. 2,23,12,103/- only. The appellant furnished a list of parties from whom receipts amounting to Rs. 3,81,11,052/- was received on which the parties deducted the TDS amounting to Rs. 7,64,147/- and a list of parties from whom it has receipts amounting to Rs. 56,31,716/- but TDS was not deducted by the parties on these payments. Further, on examination of the copy of the ITR it was observed that the appellant claimed TDS of Rs. 7,64,147/-, which corresponds to gross receipt of Rs. 4,37,42,168/-. As the gross receipt from business activity during the year was Rs. 4,37,42,768/- whereas the appellant has disclosed turnover of Rs. 2,23,12,103/- only therefore, the difference in sales turnover amounting to Rs. 2,14,30,665/- was added back to the total income of the appellant. The appellant stated that they are engaged in the business of Freight/ Forwarding agents including handling of documents pertaining to cargo. The Service....
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....otal income at Rs. 2,45,62,940/- by adding an amount of Rs. 2,14,30,665/- on account of mismatch in sales turnover to the total income. The AO has considered the total receipt as per 26AS amounting to Rs. 3,81,11,052/- but the appellant disclosed Rs. 2,23,12,103/-. On perusal of party-wise and bill wise details with reconciliation of amount as appearing in AS-26 i.e. Rs. 3,81,11052/- on which TDS was deducted by the Parties and even detail related to those parties where TDS was not deducted it is observed that the AO has brushed aside all the documents submitted by the appellant. Further expenses amounting to Rs. 2,14,30,665/- which relates to Airlines / Shipping Line were never claimed by the appellant as evident from the Profit and Loss Account. Appellant has explained the mismatch by submitting party-wise break up of Total Revenue containing Freight collected and Paid, Terminal and other Charges, appellant's Share of Income, Service Tax Collected and paid duly reconciled with AS-26, party-wise detail of Freight collected and Payment, Reconciliation between Income as per TDS certificate (26AS) with Bills Issued. Since the customer has deducted TDS on Gross value of Bills without ....
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....s, 1962, credit of TDS is permissible only in respect of income that is assessable in the hands of the assessee. * In the present case, the assessee claimed full TDS credit of Rs. 7,64,147/-, but did not offer the corresponding receipts of Rs. 2,14,30,665/- as income. * By deleting the addition, the ld. CIT(A) has conferred a benefit of TDS credit without ensuring that the related receipts are included in taxable income, which is contrary to the statutory mandate. 2. Failure of Assessee to Discharge Onus of Proof * The burden of proving that certain receipts were not in the nature of assessee's income squarely lies upon the assessee. * The assessee merely relied on internal reconciliations and accounting entries without furnishing any corroborative material such as: o Agreements with Airlines/Shipping Lines, o Confirmations from such third parties, o Proof of onward remittance of the alleged pass-through payments. * In absence of such independent evidence, the CIT(A) erred in law in accepting a bald explanation and rejecting the addition made by the AO. 3. Reliance on Past Acceptance is Mi....
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....s of the case, the ld. CITA) was not justified that intimation under section 143(1) is a self-assessment, intimates about processing of return, and is not an assessment framed by the AO. Therefore the order of the Ld. CIT[A] may kindly be set aside and order of the AO be restored allowing the present appeal of the revenue." 6. On the other hand, ld. AR of the assessee submitted as under :- "1.1 The receipts as per 26AS/AIS amounted to Rs. 83,81,052/-, whereas the receipts as per Profit & Loss Account were Rs. 2,23,12,103/-. In this regard, the assessee submitted: * A list of parties from whom receipts of Rs. 3,81,11,052/- were received, on which TDS of Rs. 7,64,147/- was deducted. (Page 98 to 100 of PBK) * A list of parties from whom receipts of Rs. 256,31,716/- were received, on which no TDS was deducted. (Page 101 - 104 of PBK) The assessee also submitted a reconciliation of the difference between receipts as per 26AS and receipts as per the Profit & Loss Account, as under: Particulars Amount (Rs. ) Receipts as per 26AS 3,81,11,052 Receipts not reflected in 26AS 56,31,716 Gross Receipts (incl. Freight Charges) ....
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....e receipts of Rs. 2,23,12,103/- as per the Profit & Loss Account of the assessee, and added he differential amount of Rs. 2,14,30,665/- as income of the assessee. However, the said addition of Rs. 2,14,30,665/- represents nothing but freight charges included in receipts as per Form 26AS of the assessee. Despite the assessee filing detailed submissions of around 350 pages, the Assessing Officer failed to appreciate the business model and the method of accounting consistently followed by the assessee. As a result, an addition of Rs. 2,14,30,665/- was made, which is purely in respect of reimbursement of freight charges. While passing the assessment order, the Assessing Officer neither considered nor dealt with the detailed submissions placed on record, thereby rendering the order a non-speaking one. 2. CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE ADDITION 2.1. Aggrieved by the order of AO, the Assessee filed appeal before CIT(A) on 12/01/2019, the CIT(A) vide his order dated 04/02/2025 deleted the addition on the following: "AO completed the assessment by assessing total income at Rs. 2,45,62,940/- by adding an amount of Rs. 2,14,30,665....
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....er of Income-tax v. K.M. Trade Link |147 taxmann. com 227), in a case similar to that of the assessee, held that the Assessing Officer had erred in making additions towards the difference between gross receipts as per Form 26AS and the books of account of the assessee. 3.2. It has been consistently held by various courts that reimbursements are not taxable as no profit element included therein: * Commissioner of Income-Tax Versus Industrial Engineering Projects Pvt. Limited, 202 ITR 1014, Delhi High Court * COMMISSIONER OF INCOME-TAX Versus SIEMENS AKTIONGESELLSCHAFT 310 ITR 320, Bombay High Court * Director of Income Tax (International Taxation) Scindia House, Versus Krupp Udhe GMBH. 354 ITR I73, Bombay High Court. 4. GROUND RAISED BY DEPARTMENT IS INCORRECT AND APPEAL DESERVED TO BE DISMISSED In the grounds of appeal, the Department has also incorrectly invoked Section 199, which merely deals with credit of TDS and is not relevant in the present case. Without prejudice to this the assessee shall be entitled to credit of TDS even in respect of credits which are not liable to tax as held by: * Escorts Lid. Versus Deputy....