THE MEDISERV,PATNA vs. ITO, WARD 4(5), PATNA

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ITA 36/PAT/2023Status: DisposedITAT Patna17 May 2023AY 2014-156 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the difference was due to the inclusion of service tax in Form 26AS, which the assessee had excluded from its reported gross receipts. The assessee's reconciliation of figures was accepted.

What were the facts?

The assessee, a partnership firm, reported gross receipts of Rs. 39,09,400, while Form 26AS showed Rs. 43,03,044. The Assessing Officer (AO) added the difference of Rs. 3,93,644 as undisclosed income.

What were the issues?

Whether the addition made by the AO on account of the difference between reported gross receipts and Form 26AS was justified, considering the service tax component.

Which sections of the Income-tax Act were involved?

Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PATNA BENCH

Before: SHRI RAJPAL YADAV & SHRI GIRISH AGRAWAL

For Appellant: Shri Manish Rastogi, Advocate
For Respondent: Shri Rupesh Agrawal, Sr. DR
Hearing: 11.05.2023Pronounced: 17.05.2023

O R D E R

PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

1.

This appeal filed by the assessee is against the order of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi vide Order No. ITBA/NFAC/S/250/2022-23/1048309234(1) dated 28.12.2022 against the order of ITO, Ward-4(5), Kolkata u/s. 144 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 17.10.2016 for AY 2014- 15.

2.

Sole ground raised by the assessee in the present appeal is in respect of addition made by the Ld. AO towards difference of gross receipts as reflected in Form 26AS and that reported by the assessee, amounting to Rs.3,93,644/-.

The Mediserv, AY: 2014-15 3. Brief facts of the case are that assessee is a partnership firm and filed its return reporting total income at Rs.6,94,540/-. In the course of assessment, Ld. AO noted that assessee has shown gross receipts of Rs.39,09,400/- as against gross receipts reflected in Form 26AS of Rs.43,03,044/-. On account of this difference of Rs.3,93,644/-, ld. AO called for explanation from the assessee. Not convinced by the submissions, Ld. AO completed the assessment by making addition of this difference of Rs.3,94,644/- by treating it as undisclosed gross receipt. Aggrieved, assessee went in appeal before the ld. CIT(A) who dismissed the same.

4.

Ld. Counsel for the assessee contended that assessee is engaged in the business of providing servicing of medical equipments to the customers of M/s. Siemens Limited under a works contract. Service charges received by the assessee from Siemens Ltd. is subjected to TDS which are duly reflected in Form 26AS. It was submitted that on the service charges received by the assessee, service tax is also collected which is subsequently deposited to the Government account. Service charges received by the assessee exclusive of service tax, accounts to Rs.39,09,400/-. When the service tax component is added, the total comes to Rs.43,03,043/-. He thus submitted that the gross receipts reflected in Form 26AS is inclusive of service tax whereas assessee has filed its return by taking the gross receipts without the component of service tax. Hence, there is no difference in the reporting of the gross receipts which has a bearing on the total income returned by the assessee. Therefore, it was claimed that the addition made by the Ld. AO on account of this difference by treating it as undisclosed gross receipt is not tenable. To reconcile the factual details, a statement was submitted which is reproduced as under:

The Mediserv, AY: 2014-15 4.1. Further, assessee submitted the break-up of payments received by it towards service charges and reconciled it with the gross receipts as reflected in Form 26AS which is also reproduced for ease of reference:

4.2 The details reflected in Form 26AS towards amount paid/credited by Siemens Ltd. to the assessee and TDS done thereon is also reproduced as under:

4.3. On the above factual submissions, Ld. Sr. DR could not bring any material to controvert the same and placed reliance on the order of Ld. AO.

5.

We have heard the rival contentions and perused the material available on record. The fact as reproduced above in respect of gross receipts towards service charges and the The Mediserv, AY: 2014-15 component of service tax are undisputed. Addition made by the Ld. AO is on account of difference between the figure of gross receipts reported by the assessee which is including the service tax component whereas the figure reported in Form 26AS is inclusive of the service tax component which has been adequately reconciled by the assessee from the charts reproduced above. From the above factual matrix, we find that the addition made by the Ld. AO on account of difference of Rs.3,94,644/- between the two above stated figures by treating it as undisclosed gross receipt is not tenable. Accordingly, the addition so made is deleted. The grounds taken by the assessee in this respect are allowed.

6.

In the result, appeal of the assessee is allowed.

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