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Income Tax Appellate Tribunal, CUTTACK ‘SMC’ BENCH, CUTTACK
Before: SHRI CHANDRA MOHAN GARG
O R D E R This is an appeal filed by the revenue against the order of the CIT(A), Sambalpur dated27.9.2019 for the assessment year 2007-08.
None appeared on behalf of respondent-assessee when the matter was called for hearing. Hence, I proceed to decide the appeal of the revenue qua- respondent assessee after hearing ld D.R. and on the basis of materials available on record.
Ground No.1 relates to deletion of Rs.29,68,839/- being the difference between gross receipt shown in TDS certificates vis-à-vis turnover disclosed in profit and loss account in violation of Rule 46A of I.T.Rules.
On perusal of appeal record, I observe that this appeal can be disposed of on the basis of material available on record and after hearing the submission of ld Departmental Representative (DR). Therefore, I proceed to decide the appeal
P a g e 1 | 4 64/CTK/201 9 Assessm ent Y ear : 20 07- 200 8 V 5 I have heard the submissions of ld D.R. and perused the appeal record of the case. Ld D.R. submitted that in this case, as per the order u/s.263 of the Act, of the ld CIT, the Assessing Officer framed the assessment disallowing Rs.29,68,839/- being the difference shown in the gross receipts of Rs.1,58,60,136/- as per TDS certificate and in the profit and loss account of Rs.1,28,91,297/- on the ground that the assessee could not produce evidence in support of the difference detected by ld CIT. Hence, the order of the ld CIT(A) be reversed on this ground.
On perusal of the order of the ld CIT(A),I find that the sale bills furnished by the assessee before the ld CIT(A) reveals that the actual sale figure stood at Rs.1,75,77,243/-, which includes non-TDS sales of Rs.19,45,347/-. It was also demonstrated that after deducting labour charges of Rs.30,67,080/-, VAT of Rs.16,11,422/- and entry tax of Rs.7,444/-, the sale figures comes to Rs.1,28,91,297/- which tallies with the figure disclosed by the assessee in his profit and loss account. I observe that the above three amounts cannot be included in the total sales of the assessee.
As regards to violation of 46A rules alleged by the revenue, I am of the considered that the ld CIT(A) has taken into consideration the amount of labour charges, VAT and entry tax, which cannot be considered to be included in the total sales. From first appellate order, I am unable to see any observations of ld CIT(A) wherein, I could gather that the assessee sought to submit any additional evidence under sub-rule (1) of Rule 46A of the Income tax Rules, 1962 (‘ the Rules’). Be that as it may, I can not ignore that under sub-rule (4) of Rule 46A of the Rules,
P a g e 2 | 4 64/CTK/201 9 Assessm ent Y ear : 20 07- 200 8 V the first appellate authority is empowered to direct the appellant for production of any document to enable him to dispose of the appeal. Therefore, I am not in agreement of the contention of ld D.R. that there was violation of Rule 46A of the Rules by the ld CIT(A) for both the grounds. That being the case, I do not see any reason to interference with the order of the ld CIT(A) in deleting the addition of Rs.29,68,839/- and dismiss Ground No.1 of the revenue.
Ground No.2 is with respect to deletion of Rs.5,42,108/- on account of undisclosed security deposits.
I find that since the assessee failed to produce reconciliation statement of security deposits as per TDS certificates with the amount shown in the balance sheet, the AO considered the same as undisclosed asset of the assessee and added the same to the total income, which was deleted by the ld CIT(A).
On perusal of the order of the ld CIT(A), I find that the amount of Rs.5,42,108/- was deducted by the Government agencies while making payments to the assessee as meant to act as guarantees for timely execution of work. The above amount was duly reflected by the assessee under the head “sundry debtors” in the balance sheet. That being the facts, I have no hesitation to uphold the decision of the ld CIT(A) and dismiss this ground of the revenue.
In the result, appeal of the revenue is dismissed.