What did the Tribunal hold?

The Tribunal held that the assessee had duly accounted for the receipts in its books of accounts and the AO's action resulted in double addition of the same income. The addition made by the AO was deleted.

The assessee, engaged in the transport business, accounted for receipts and payments from third-party transport contracts by netting them off. The AO noted a difference between turnover in the audit report and Form 26AS, leading to an addition of 5.01% of the difference as profit.

What were the issues?

Whether the AO erred in making an addition on income that was already accounted for and offered to tax by the assessee, leading to double taxation.

Baljitsingh Jarinail Singh Saini… vs ITO | ITAT Mumbai 2026

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: HON’BLE SHRI PAWAN SINGH & HON’BLE SHRI GIRISH AGRAWAL

For Respondent: Shri Ujjwal Kumar, Sr. DR

Pronounced: 04.06.2026

INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: SMC BEFORE HON’BLE SHRI PAWAN SINGH, JUDICIAL MEMBER AND HON’BLE SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA 9250/MUM/2025 निर्धारणवर्ा/Assmt. Year:2016-17) Permanent Account Number: ACKPS4639P BALJITSINGH JARNAIL THE INCOME TAX SINGH SAINI OFFICER WARD 2(5) 205/2, SAIBABA NAGAR, KALYAN SHANTINAGAR, ULHASNAGAR, Vs. KALYAN, MAHARASHTRA THANE, MAHARASHTRA 421301 421004 (प्रत्यर्थीRespondent) (अपीलार्थीAppellant)

निर्धाऩितीद्वधिध/Assessee represented by: Shri Fenil Bhat, Advocate िधजस्विद्वधिध/Revenue represented by: Shri Ujjwal Kumar, Sr. DR

सुिवधईकीतधिीख/Date of conclusion of hearing: 09.03.2026 घोषणधकीतधिीख/Date of pronouncement: 04.06.2026 आदेश / ORDER PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal is filed by the assessee is against the order of Ld. Commissioner of Income Tax (Appeal)-1, Bengaluru vide DIN: ITBA/APL/S/250/2025-26/1082129206(1) dated 30.10.2025 passed against the assessment order by Assessment Unit of the Income-tax Department u/s 143(3)of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 17.12.2018for the Assessment Year 2016-17.

Assessee has raised the following ground of appeal:

i. The CIT(A) erred in not appreciating the fact that the sales amounting to Rs. 1,67,30,469/- has been recognized in the books of accounts as income. The Appellants respectfully pray that ITO be directed to deleted the addition of Rs. 8,38,196 (5.01% of Rs. 1,67,30,469/-). 2.1. The moot point raised by the assessee is on taxing the same income, double which has already been offered to tax, being duly recognized in the books of accounts.

Briefly stated, the relevant facts of the case are that assessee is engaged in the business of transport of goods for which he uses his own fleet of trucks as well as outsources to third party transporters by way of transport contract, so as to meet his contractual obligations. According to the assessee, in respect of transport contract with third party transporters, he receives the amount from the parties against which payment towards transport charges to the transport operators including loading/unloading charges are made by him. Thus, while recording these transactions of transport contract to third party transporters, netting off is done for the receipts and the payments made by him which is then accounted for in the books of account. It is because of this accounting methodology of netting off which gave rise to the issue leading to addition in the hands of the assessee.

3.1. In this regard, ld. AO noted that assessee has shown total turnover/freight receipts in his audit report at Rs. 3,29,75,647/- whereas in Form 26AS, it is reflected as Rs. 4,69,40,907/-. Details were called for against which assessee submitted a reconciliation statement to reconcile the total receipts accounted by him in his books of account and those reflected in Form 26AS. Ld. AO took cognizance of the reconciliation statement, he also took note of the submissions about the modus operandi adopted by the assessee while hiring third party containers from the transport operators. However, he noted 2

about his un-clarity on the submissions made by the assessee to arrive at a difference in the turnover of Rs. 1,67,30,469/-, being the difference between Rs. 4,88,57,757/- shown in the reconciliation statement and Rs. 3,21,27,288/- reflected in the profit and loss account. On these differences of turnover, he adopted net profit rate of 5.01% which the assessee had reported in his audited financial statements to work out profit of Rs. 8,38,196/- for making the impugned addition.

Before the ld. CIT(A), assessee reiterated all the submissions which were found to be not satisfactory, resulting in sustaining the addition made by the ld. AO and dismissal of the first appeal against which assessee is in appeal before the Tribunal.

We have heard both the parties and perused the material on record. We have given our thoughtful consideration to the orders of the authorities below and perused the paper book filed by the assessee containing 25 pages. Taking in to account the observations of ld. AO made in para 3.3, it is an admitted fact that assessee has two different methodologies of conducting his business, one out of his own fleet of transport vehicles and another by engaging into transport contracts with third party transport operators. This fact is also disclosed by the assessee in his audited financial statements and audit report by way of a note forming part of Schedule-12 wherein it is stated that ‘the gross receipts of our business by using own Tankers and the commission earn on business given to other parties by using their Tankers are the basis of revenue recognition’. Assessee has also furnished respective ledger account to reconcile the method of accounting adopted by him in respect of transport contracts with third party transporters.

5.1. Ld. Counsel for the assessee explained that assessee earned total freight income of Rs. 4,81,16,905/- and also earned commission income of Rs. 7,40,852/-,aggregating to Rs. 4,88,57,757/-. Out of the total freight receipt of Rs. 4,81,16,905/-, assessee had receipt of amount of transport contracts with third party operators amounting to Rs. 1,59,89,616/-. Details in this regard is tabulated below: Sr. No. Head Amount (Rs.) 1. Transportation Charges (Expenses) 1,57,00,555/- 2. Shortage (Expenses) 2,66,680/- 3. Cargo Charges (Expenses) 2,440/- 4. Rate Difference (Expenses) 19,941/- Total freight income transferred to various expenses 1,59,89,616/- account 5.2. Assessee had accounted for the payments made to the third- party operator as expenses in the books of account. He credited these receipts of Rs. 1,59,89,616/- to the respective expense account resulting into netting off. He thus, reconciled the difference noted by ld. AO, details of which tabulated below: Sr. No. Particulars Amount (Rs.) 1. Freight Income credited to P & L A/c 3,21,27,289/- 2. Commission income credited to P&L account 7,40,852/- 3. Freight Income credited / netted off against various 1,59,89,616/- expenses account (as explained above) 4. Total Freight & commission income 4,88,57,757/- 5. Total income shown in the income reconciliation 4,88,57,757/- statement filed with the AO 6. Difference Nil 5.3. Ld. Counsel for the assessee thus, evidently demonstrated that assessee has duly accounted for the receipt of Rs. 4,88,57,757/- in the books of accounts and reported the income thereon in the return so filed by him. There is no variation in the income reported in the reconciliation statement, income accounted in the books of accounts, return filed by the assessee and entries reflected in Form 26AS. Action of ld. AO of adding net profit element on the freight receipts which has already been accounted and reported has led to double addition of the same income.

5.4. We have perused the documentary evidences placed on record for the reconciliation as explained by the ld. Counsel for the assessee. We find merit in the submissions made by the ld. Counsel. Taking into account the documentary evidences placed on record and the explanation so furnished, we agree that the action of ld. AO has led to double addition in respect of transport receipts which has already been accounted for by the assessee. The addition so made is deleted. Ground raised by the assessee is allowed.

In the result, appeal filed by the assessee is allowed.

Order pronounced in the open court on 04.06.2026

Sd/- Sd/- (Pawan Singh) (Girish Agrawal) Judicial Member Accountant Member Ankit, PS Mumbai Dated: 04.06.2026 Copy to:

BALJITSINGH JARNAIL SINGH SAINI 205/2, SAIBABA NAGAR, SHANTINAGAR, 1 ULHASNAGAR, THANE, MAHARASHTRA 421004

THE INCOME TAX OFFICER WARD 2(5) KALYAN 2 KALYAN, MAHARASHTRA 421301 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAIBENCH 5 GUARD FILE TRUE COPY ASSISTANT REGISTRAR / SR. PRIVATE SECRETARY I.T.A.T., MUMBAI

BALJITSINGH JARINAIL SINGH SAINI,THANE vs. THE ITO WARD-2(5), THANE

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