NEW ERA COATINGS LLP,KOLKATA vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3(1), KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘A’ BENCH, KOLKATA BEFORE SHRI DUVVURU R. L. REDDY, VICE PRESIDENT AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER I.T.A. No.2116/KOL/2024 Assessment Year: (2013-14) New Era Coatings LLP DCIT, (Upon conversion into LLP earlier Vs. Circle – 3(1), known as: New Era Coatings Kolkata Private Limited) CA Anup Kumar Sanghai, Sanghai & Co., 21, Hemanta Basu Sarani, 2 nd Floor, Room No.204, Kolkata – 700001, West Bengal [PAN: AADCN8208K] (Appellant) .. (Respondent) Appellant by : Shri Anup Sanghai, CA Respondent by: Shri Raman Garg, CIT-DR Date of Hearing 11.06.2026 Date of Pronouncement 11.09.2026

O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER:

This appeal is preferred by the assessee against the order of learned Commissioner of Income Tax, National Faceless Appeal Centre, (hereinafter referred to as the “ld. CIT(A)”], Delhi, dated 23.08.2024 for the Assessment Year (AY) 2013-14.

“1. That the impugned Order dated 23rd August, 2024 passed by Commissioner of Income Tax (Appeals) at National Faceless Assessment

ITA No.2116/Kol/2024/A.Y.2013-14 New Era Coatings LLP vs. DCIT Centre, Kolkata [hereinafter known as "CIT (A) at NFAC"] under section 250 of the Income Tax Act, 1961 is perverse, unjustified, arbitrary, erroneous, bad in law, impugned order has been passed on mere surmises and conjectures and contradictory to the facts of the case and liable to be quashed from its inception. 2. That on the facts and circumstances of the case as well as law on the subject the CIT(A) at NFAC was not justified in confirming the addition of Rs. 1,44,14,934/- by the Assessing Officer on account of undisclosed receipt not offered for taxation on the basis of alleged difference in the 26AS statement and Profit and Loss Account of the Appellant. 3. That on the facts and circumstances of the case as well as law on subject, the income reported in Form 26AS cannot be treated as the gospel truth that the Appellant has earned so much of the income. 4. That on the facts and circumstances of the case as well as law on subject, the income reported in form 26AS can be a reason for suspicion/doubt about the actual income earned by the Appellant in the income tax return in the event there is a mismatch. But it cannot be a sacrosanct document to hold the issue against the Appellant. 5. That on the facts and circumstances of the case the CIT(A) at NFAC failed to consider the fact that the TDS was deducted by the Company to which the Appellant has made its substantial sales and services u/s 194C on GROSS AMOUNT of all the bills which were raised on the basis of works order issued to the Appellant. 6. That on the facts and circumstances of the case, the CIT(A) at NFAC has failed to consider the fact that the Tax was deducted by the Company on the Gross Amount of all the composite bills (Goods + Services) and not only on the amount of the sale of services. 7. That on the facts and circumstances of the case, the CIT (A) at NFAC erred in considering the fact that the receipt corresponding to the TDS in Form 26AS comprises of the total revenue i.e. revenue from sale of goods and revenue from sale of services and hence, there was no receipt which remain undisclosed and not offered for taxation by the Appellant during the FY 2012- 13 relevant to the AY 2013-14. 8. That on the facts and circumstances of the case the Appellant has duly discharged the onus by submitting the copy of the sample Bill(s) raised by the Appellant on account of sale of goods as well as sale of services showing that the TDS was deducted on Gross Bill Value thereby, shifting the onus upon the

ITA No.2116/Kol/2024/A.Y.2013-14 New Era Coatings LLP vs. DCIT Revenue to disapprove the contention of the Appellant based on the documentary evidence. 9. That on the facts and circumstances of the case, no CROSS VERIFICATION was done independently on the Deductor of the TDS that is on the companies namely Tata Motors Limited to whom substantial sales (almost 99.99% of the sales) were made to know the actual amount of the sales of goods and services. 10. That on the facts and circumstances of the case as well as law on subject, the Receipts as per 26AS unless cross verified independently from the actual facts and figures cannot became a basis for addition of substantial amount of Sales, in a case where books of accounts of the Appellant are audited and Tax Audit Report are furnished by the Tax Auditor u/s 44AB of the Act. 11. For that the Appellant craves for further Grounds of Appeal to be submitted at the time of hearing, given an opportunity of being heard and leave to add, alter and modify any ground of appeal at or before the hearing of the appeal.” 3. The facts of the case in brief are that the appellant was engaged in the business of Sand Blasting, pre-treatment and electro quote of cross member ,its child parts and sub assembly of cross members through engineering services at its unit located within the premises of M/s Tata Motors Limited at Jamshedpur, Jharkhand. The Appellant Company is having its registered office situated at 2, British Indian Street, Newly-2, Abdul Hameed Street, Kolkata - 700069.The appellant was providing contractual services mainly to M/s. Tata Motors Limited. In the course of such business, the Appellant was raising composite invoices comprising the value attributable to goods as well as to services, along with applicable statutory levies. The invoices raised on Tata Motors Limited included, inter alia, amounts towards sale of goods, service charges and statutory levies such as Excise Duty, Service Tax and VAT, as applicable during the relevant period. On these composite invoices, TDS (Tax Deducted at Source) was being deducted by Tata Motors on the Composite Invoices pertaining to both the sale of goods or services including statutory

ITA No.2116/Kol/2024/A.Y.2013-14 New Era Coatings LLP vs. DCIT levies viz. Excise Duty, Service Tax and VAT. The present appeal relates to the addition of Rs. 1,44,14,934/- made by the Assessing Officer on account of an alleged difference between the revenue/receipts reflected in Form 26AS and the revenue/sales disclosed in the books of account and audited financial statements of the Appellant for the F.Y. 2012-13 relevant to A.Y.2013-14.The aforesaid addition has arisen essentially because the Assessing Officer has compared the amount reflected in Form 26AS with the revenue considered by him after excluding the value of sale of goods, without properly appreciating the nature of the composite invoices and the TDS deducted thereon and the manner in which the transactions were recorded in the books of account. As per Form 26AS, the following revenue were received by the Appellant from the Contractual services for the A.Y. 2013-14:

Particulars Amount (Rs.) % of Sales Revenue from Tata Motors Limited 14,24,18,057 99.99% Revenue from Others 2,477 0.01% Total Revenue as per Form 26AS 14,24,20,534 100.00% Total TDS reflected in Form 26AS 28,47,153 Summary of revenue/sales as per Audited Financial Statements and as per Assessing Officer: Details of ACTUAL Sales/Revenue as per Audited Financial Statements for the Financial Year 2012-13 relevant to AY 2013-14 Sl No. Particulars Amount (Rs.) Amount (Rs.) A. Sale of Goods including Excise 3,15,48,002/- Duty B. Less: Excise Duty 1,45,67,387/- C. Sale of Goods excluding 1,69,80,615/- Excise Duty (A – B) D. Sale of Services 10,72,11,548/- E. Total Sale of Goods and 12,41,92,163/- Services (C + D) (EXCLUDING ANY TAXES) F. Add: Excise Duty 1,45,67,387/- G. Add: Service Tax 1,32,51,359/-

ITA No.2116/Kol/2024/A.Y.2013-14 New Era Coatings LLP vs. DCIT H. Add: VAT 75,42,682/- I. GROSS SALES (E+F+G+H) 15,95,53,591/- (INCLUSIVE OF TAXES) Sales/Revenue as per Assessing Officer Sl No. Particulars Amount (Rs.) Amount (Rs.) A. Total Gross Sales/Turnover of 15,95,53,591/- Goods and Services B. Less: Sales of Goods including (3,15,48,002/-) 12,80,05,589/- Excise Duty C. Total Sales As per Form 26AS 14,24,20,523/- (INCLUSIVE OF TAXES) D. Alleged Undisclosed Income 1,44,14,934/- As Per Assessing Officer

ITA No.2116/Kol/2024/A.Y.2013-14 New Era Coatings LLP vs. DCIT 6. We have heard the rival contentions and perused the materials on records. We note that there is no undisclosed sales/revenue or unaccounted receipt in the books of the assessee. We note that the alleged difference has arisen solely on account of the fact that the TDS was deducted on the composite invoice value comprising both the sale of goods and services, and the corresponding transactions were duly recorded and accounted for in the books of the Appellant. Considering these facts, we of the view that the addition was wrongly made by the AO and also confirmed by the ld. CIT(A). We have examined the reconciliation furnished before us and are of the considered view that there is no suppression of receipts of Rs. 1,44,14,934/- as alleged by the Assessing Officer and there is no undisclosed sales, receipts or income of the Appellant. The entire sales of goods and sale of services were duly recorded in the books of account and duly reflected in the audited financial statements. The difference has arisen only on account of an incorrect reconciliation of the composite invoice values of sale of goods and sale of services with the receipts appearing in Form 26AS. Accordingly, we set aside the order of ld. CIT(A) and direct the AO to delete the addition of Rs.1,44,14,934/-. The appeal of the assessee is allowed.

The order is pronounced in the open Court on 11/09/2026.

Sd/- Sd/- (Duvvuru R. L. Reddy) (Rajesh Kumar) VICE PRESIDENT ACCOUNTANT MEMBER Kolkata, Dated: 11/09/2026 SAMANTA

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BY ORDER, // TRUE COPY // Deputy Registrar, ITAT, Kolkata