DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(1), PUNE, PUNE vs. HONEYWELL AUTOMATION INDIA LIMITED , PUNE

Facts of the case, in brief, are that the assessee is a company engaged in automation and control industry. The company has a track record of pioneering projects in core industrial automation and intelligent building control systems. It provides solution to industrial sectors such as petroleum and petrochemicals, chemicals, metals & minerals and pharmaceuticals. It filed its return of income on 28.11.2016 declaring total income of Rs.2,13,88,02,780/-. Subsequently it filed revised return on 16.06.2017 declaring total income of Rs.2,27,25,51,380/-. Again the return was revised on 29.03.2018 declaring total income of Rs.2,27,04,54,750/-. Subsequently the case was selected for scrutiny and

During the course of assessment proceedings the Assessing Officer asked the assessee to reconcile the income / receipts and TDS reflecting in Form 26AS vis-à-vis the figures of such components appearing in the books of the assessee company. The assessee in response to the same submitted as under which has been reproduced by the Assessing Officer in the body of the assessee which reads as under:

However, the Assessing Officer was not satisfied with the arguments advanced by the assessee and made addition of Rs.8,45,53,050/- to the total income of the assessee by observing as under:

Similarly, the Assessing Officer also disallowed an amount of Rs.2,09,84,561/- by invoking the provisions of section 40(a)(i). However, the same is not the subject matter of appeal. Therefore, we are not concerned with the same. The Assessing Officer accordingly determined the total income of the assessee at Rs.237,59,92,360/-.

In appeal, the Ld. CIT(A) deleted the addition made by the Assessing Officer by observing as under:

Aggrieved with such order of the Ld. CIT(A) the Revenue is in appeal before the Tribunal by raising the following grounds:

The Ld. DR heavily relied on the order of the Assessing Officer and submitted that despite the assessee failed to reconcile the entire receipts accounted for in the books of account and as reflected in Form 26AS, the Ld. CIT(A) deleted the addition made by the Assessing Officer which is not justified. He accordingly submitted that the order of the Ld. CIT(A) be set aside and that of the Assessing Officer be restored.

The Ld. Counsel for the assessee on the other hand referring to the order of the Ld. CIT(A) for assessment year 2014-15, copy of which is placed at pages 107 to 111 of the paper book, submitted that similar addition made by the Assessing Officer was deleted by the Ld. CIT(A) and the Revenue has not filed any appeal on this issue. He submitted that the addition made by the Assessing Officer, if sustained, will amount to double addition.

Referring to the decision of the Mumbai Bench of the Tribunal in the case of Shri S Ganesh vs. ACIT vide ITA No.527/Mum/2010 order dated 08.12.2010 drew the attention of the Bench to the following paragraphs: “8.2 We find sufficient force in the above submissions of the assessee. Admittedly, the revenue has not controverted the submissions of the assessee before the Assessing Officer during the assessment proceedings as well as remand proceedings that all professional fees received are by way of cheques and all such cheques have been deposited in his Oriental Bank of Commerce Account, South Extension Branch, New Delhi (vide letter addressed to Assessing Officer on 8.10.208). Therefore, in absence of any contrary material brought by the revenue authorities that the assessee has received amount more than the professional fees than what has been declared by him, no addition should have been made. It is also a fact that the professional income declared by the assessee far exceeds the professional fees as per AIR information. There may be so many reasons such as low deduction of tax, non-deduction of tax, deduction on account of reimbursement of expenses etc., for which the figure as per the AIR may not tally with the income declared by the assessee on account of professional fees from various clients. Further, it has categorically been explained by the assessee that it is not practically possible to give detailed party wise breakup of fees receipts since the assessee received his fees either directly from the clients or from the instructing advocates or CAs, if they have collected the amounts from the clients. Similar explanation have been accepted in the past in scrutiny assessment and no addition has been made, a fact already brought on record. In this view of the matter, we find sufficient force in the submissions made by the assessee that no addition is called for on this account. Accordingly, we set aside the order of the CIT(A) and direct the Assessing Officer to delete the addition.”

He submitted that the appeal filed by the Revenue was dismissed by the Hon’ble Bombay High Court vide Income Tax Appeal No.1930 of 2011, order dated 18.03.2014, copy of which is placed at pages 68 and 69 of the paper book which reads as under:

Referring to the following decisions, he submitted that the figures reflecting in Form 26AS is not the income accruing to the assessee: i. PCIT vs. MBC Infra Space (P.) Ltd. (2023) 153 taxmann.com 108 (Guj) ii. TUV India (P.) Ltd. vs. DCIT (2019) 110 taxmann.com 175 (Mumbai – Trib.) iii. ACIT vs. Patel Engineering Ltd (2025) 173 taxmann.com 768 (Mumbai – Trib.)

Referring to the following decisions he submitted that when the receipts as per books of account are higher than Form 26AS, then no addition can be made: i. CIT vs. Shri S. Ganesh vide Income Tax Appeal No.1930 of 2011, order dated 18.03.2014 ii. Shri S Ganesh vs. ACIT vide ITA No.527/Mum/2010 order dated 08.12.2010 iii. M/s. A.F. Ferguson & Co. vs. JCIT vide ITA Nos.5037/M/2012 & 437/M/2013 order dated 17.10.2014 for assessment years 2008-09 and 2009-10 iv. M/s. Lintas India Private Limited vs. DCIT vide ITA Nos.1156/Mum/2015 & 1187/Mum/2015 order dated 12.06.2019 for assessment year 2010-11 v. DCIT vs. M/s. Honeywell Automation India Ltd vide ITA No.332/PUN/2021 order dated 24.11.2021 for assessment year 2014-15

He accordingly submitted that the order of the Ld. CIT(A) being in accordance with law should be upheld and the grounds raised by the Revenue be dismissed.

We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer in the instant case made addition of Rs.8,45,53,050/- on the ground that there is difference between the figures reflected in Form 26AS and the sales receipts as per books of account. We find the

In the result, the appeal filed by the Revenue is dismissed.