ARMIN PERCY CAPTAIN,MUMBAI vs. INCOME TAX OFFICER 20(1)(2), PIRAMAL CHAMBERS

आदेश / O R D E R Per Amarjit Singh (AM): This appeal filed by the assesse is directed against the order passed by the ld. CIT(A) NFAC, dated 10.02.2023 for A.Y. 2014-15. The assessee has raised the following grounds before us: “1. On the facts and circumstances of the case and R in law the learned Commissioner of Income Tax (F (Appeals) - NFAC erred in confirming the order of n the Assessing officer and thereby adding the f amount of INR 33,19,289/- being the difference t of income as per 26AS and the gross income as declared by the appellant. The appellant prays that the said amount of INR 33,19,289/- is not the income of the appellant and hence, the addition made by the learned Commissioner of Income Tax (Appeals) - NFAC be deleted.

2. Without prejudice to the above, on the facts and circumstances of the case and in law the learned Commissioner of Income Tax (Appeals) - NFAC erred in adding the gross difference between Income as per Form 26AS in comparison with the turnover declared by the appellant as P a g e | Armin Percy Captain Vs. ITO 20(1)(2) against adding only margin of profit of 10 % to the income of the appellant. Your appellant prays that at best, an amount of INR 3,31,928/- be added to the income of appellant being 10 % of the difference amount of INR 33,19,289/- between Form 26AS and turnover of the year as declared by the appellant. 3. Your Appellant craves leave to add, alter, amend, delete or withdraw any or all grounds of appeal and to submit such statements, documents and papers as may be considered necessary either at or before hearing of the appeal.”

2. Fact in brief is that return of income declaring total income of Rs.624,182/- was filed on 15.10.2014. The case was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued. The assessee is an individual and proprietary of M/s Meher Enterprises working as a service provider to M/s Mearsk Limited, India a company which manufactures and sale pharmaceuticals and chemical products. During the course of assessment proceedings the assessing officer noticed that assessee has shown gross receipt as per form 26AS to the amount of Rs.815,98,086/- however, the total receipt in the profit and loss account was shown at Rs.714,49,127/-. In response, the assessee has reconciled the difference to the amount of Rs.46,92,093/- pertaining to statutory liability of ESIC, PF and professional taxes and amount of Rs.20,87,577/- paid by sister concern as service book, however, the assessee was not able to explain the difference of amount of Rs.33,19,289/-. In this regard the assessee submitted that this difference was on account of amount utilised in subsequent year. This explanation of the assessee was not accepted by the assessing officer since, the assessee was following the mercantile method of accounting and the same should have been offered for tax during the year under consideration. In view of the above facts the difference of Rs.33,19,289/- was added to the total income of the assessee.

3. The assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee.