TaxTMI 
TaxTMI 
TaxTMI 
2026 (3) TMI 225
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....ice u/s 143(2) was issued followed by notices 142(1) of the Act which were duly replied. After considering the submissions filed by the assessee company, AO assessed the income of the assessee at INR 7,33,07,986/- vide assessment order dated 31.03.2021 passed u/s 143(3) r.w.s. 143(3A) r.w.s. 143(3B) of the Act. 4. Against the said order, assessee filed an appeal before Ld. CIT(A) who vide order dated 02.02.2024, partly allowed the appeal of the assessee. 5. Aggrieved by the order of Ld.CIT(A), Revenue is in appeal before the Tribunal by taking following grounds of appeal:- 1. "This issue is related to the disallowance of Rs. 2,63,80,696/- made u/s 40a(ia) of the Act during the year under consideration. 2. This issue is related to addition on account of under reporting of total income for an amount of Rs. 2,72,82,952/-. 3. The Appellant craves leave for reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal." 6. In support of Ground of appeal No.1 raised by the Revenue, ld. Sr. DR for the Revenue submits that AO has made disallowance by observing that assessee has ....
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.... there been queries raised by the AO, the necessary reply alongwith evidences could be tendered. It is further observed that assessee has filed TDS returns which were available before the AO wherein payments made to all the parties alleged by the AO and the certificate issued to these parties are duly verifiable. Further in the Tax Audit Report, the Auditor has not made any adverse remarks with respect to the payments made nor it is observed by the Auditors that no TDS was deducted on such payments. 9. From the perusal of the order of Ld.CIT(A) at page 8 to 12 where party-wise explanation is given by the assessee in the table reproduced. It is observed that assessee has deducted the tax at source wherever applicable and thus, we find no error in the order of Ld.CIT(A) in deleting the same who after making proper verification of the details filed by the assessee has deleted the disallowance. Accordingly, Ground of appeal No.1 raised by the Revenue is dismissed. 10. Ground of appeal No.2 raised by the Revenue is with respect to the addition of INR 2,72,82,952/- regarding non-reporting of the income. 11. Before us, Ld. Sr. DR for the Revenue submits that as per Form 26AS, the....
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....ribed as per Accounting Standard-7. The assessee disclosed profits from the said project on regular basis which is tabulated at page 15 of the appellate order and thus, submits that Ld.CIT(A) has rightly deleted the additions which order deserves to be uphold. 13. Heard the contentions of both the parties at length and perused the material available on record. The main allegation of the AO is that there were certain entries in 26AS statement, according to which the gross receipts of the assessee is much higher than the gross receipts declared by the assessee in its final accounts. Therefore, he invoked the provisions of section 145(3) of the Act and estimated the income of the assessee. 14. Before Ld.CIT(A), assessee has filed the necessary explanation and reconciliation of receipts appearing 26AS statements and as per final accounts which were verified by ld. CIT(A) and while deleting the additions has made following observations in para 16 to 35 of the appellate order :- 15. Before us, Revenue has failed to controvert the findings of Ld.CIT(A) where he himself has verified the errors and omission made by AO while taking the amounts of receipts as per 26AS statement by wr....
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....13 20. The appellant in his books has disclosed the contractual receipts at Rs.43,66,79,093/ -. Therefore, the receipts disclosed by the appellant Is higher than the receipts computed by the Assessing Officer. Therefore, the very basis of pointing out discrepancy by the Assessing Officer Is flawed. 21. It Is further seen that the appellant is following mercantile system of accounting in respect of contract whereas 26AS Is on the basis of actual payment. Hence adopting figures as per 26AS actually amounts to following/adopting cash system of accounting. The Assessing Officer has not mentioned any reason as to why the system of accounting regularly followed by the appellant Is flawed and incorrect so far as determining profits from such receipts are concerned. As a matter of fact there Is bound to be difference in receipts as per 26AS and revenue disclosed In the accounts of any contractor Including the appellant. 22. After analyzing the 26AS report of the appellant, the Assessing Officer found that the appellant had receipts from various parties (mentioned in page 13, 14, 15, 16 and 17 of assessment order) amounting to Rs.10,24,20,519/ -. The Assessing Officer further state....
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....े 27. Further, the TDS Is deducted on the amount actually paid by the customer to the appellant whereas income Is recognized In the books of the appellant on the basis of POCM which have no co-relation the actual amount receipt. 28. In view of the above arguments it was claimed that there Is bound to be difference In the receipts as per 26AS and as per the revenue In the P & L account. 29. The appellant has furnished yearwise details of area sold, Income recognized In the books of accounts following POCM, Income as shown as per 26AS as well as tax deducted at source. The same is being tabulated below :- SOLUTREAN BUILDING TECHNOLOGIES PVT LTD FINANCIAL YEAR Area Income as per Profit and Loss Account Income as per 26AS TDS FY 2013-14 258880 461725538.8 141,944,604.00 1,464,558.70 FY 2014-15 258880 309875842.7 103,881,086.00 1,059,625.19 FY 2015-16 258880 0 293,000.00 2,930.00 FY 2016-17 275055 160300706.5 66,108,158.00 661,060.95 FY.2017-18 293540 21,798,760.50 96,361,122.00 963,609.54 FY 2018-19 312730 283,283,585.60 220,726,371.00 2,207,263.64 FY 2019-20 322945 6,644,149.00 136,039,474.00 1,360,394.74 FY 2020-21 367455 237,449,405.00 ....