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Facts
The assessee's appeal was filed with a delay of 45 days, which was condoned. The appeal challenged the CIT(A)'s confirmation of the Assessing Officer's disallowance, which was based on the difference between sale value and TDS value for the assessment year 2016-17. The Assessing Officer used a net profit ratio of 9.67% on this difference.
Held
The Tribunal held that the Assessing Officer was not justified in taking the TDS value instead of the sale value to make the disallowance. Material evidence, including profit & loss accounts and Form 26AS, showed a matching of sales values and TDS values for the relevant assessment years, indicating that the details were available to the Assessing Officer.
Key Issues
Whether the Assessing Officer was justified in making disallowance based on the difference between sale value and TDS value instead of relying on the sale value and matching evidence from profit & loss accounts and Form 26AS.
Sections Cited
147, 148, 143(3)
AI-generated summary — verify with the full judgment below
Before: S.S. Viswanethra Ravi
Year: 2016-17 Trinity Contracts and Services, Vs. The Income Tax Officer, 14/20 G1, Nandana Apartments, Non Corporate Ward 22(5), Ganesh Nagar, Ranganathan Street, Tambaram. Velachery, Chennai 600 042. [PAN:AAJFT0600Q] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Shri T. Vasudevan, Advocate ��थ� की ओर से/Respondent by : Ms. V. Aswathy, JCIT सुनवाई की तारीख/ Date of hearing : 03.09.2025 घोषणा की तारीख /Date of Pronouncement : 09.09.2025 आदेश /O R D E R
This appeal filed by the assessee is directed against the order dated 28.01.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2016-17.
This appeal is filed with a delay of 45 days. The assessee filed petition for condonation of delay stating the reasons in support of an affidavit. Upon hearing both the parties and on examination of the said affidavit, I find the reasons stated by the assessee are bonafide, which really prevented in filing the appeal in time. Thus, the delay is condoned and admitted the appeal for adjudication.
The assessee raised 9 grounds of appeal in challenging the action of the ld. CIT(A) in confirming the disallowance made by the Assessing Officer denying the difference between the sale value and TDS value in the facts and circumstances of the case.
4. The Assessing Officer adopted net profit ratio at 9.67% to the sale value shown by the assessee and the TDS value reflected in Form 26AS regarding Chennai Radha Engineering Works Pvt. Ltd. and added the same to the total income of the assessee. The ld. CIT(A) confirmed the disallowance made by the Assessing Officer
The ld. AR Shri T. Vasudevan, Advocate, while referring to page 1 of the paper book, submits that the sales in respect of Chennai Radha Engineering Works Pvt. Ltd. is only ₹.49,58,427/-, but, not ₹.3,03,89,893/- as reflected in Form 26AS. Further, he drew my attention to 3rd tabular column relating to AY 2017-18 at page 1 of the paper book and submits that the sale value for AY 2017-18 is ₹.3,04,45,001/-, but, not ₹.48,58,377/-. He argued that the TDS value in the year under consideration is reflected in Form 26AS was accounted in next financial year relating to AY 2017-18 and there is no difference as such as opined by the Assessing Officer.
The ld. DR Ms. V. Aswathy, JCIT submits that the details reflecting in paper book were not available before the Assessing Officer as well as the ld. CIT(A) and no details were furnished supporting the contention made by the ld. AR before the Assessing Officer and the ld. CIT(A). Further she argued that the assessee must have approached Chennai Radha Engineering Works Pvt. Ltd. to get the value corrected, but, no such efforts made by the assessee. She prayed to remand the matter to the file of the Assessing Officer for verification of the details as furnished before this Tribunal, which were not available during assessment proceedings.
Heard both the parties and perused the material available on record. I find Form 26AS for AY 2017-18 at page 19 & 20 of the paper book. On perusal of the same, it is noted that at Sl.No. 2 regarding Chennai Radha Engineering Works Pvt. Ltd., the total TDS value is only ₹.48,58,377/- which is contrary to the sale value shown by the assessee for AY 2016-17. Therefore, I find force in the argument of the ld. AR that the Assessing Officer is not justified in taking the TDS value instead of sale value shown by the assessee to make disallowance by adopting net profit to the difference between the sales value and TDS value. In support of the same, I find the profit & loss account as on 31.03.2016 placed at page 8 of the paper book and the contract receipt for the year under consideration is matching in the books of account relating to Chennai Radha Engineering Works Pvt. Ltd. at page 2 of the paper book. Further, the ledger of Chennai Radha Engineering Works Pvt. Ltd. in the books of account of the assessee relating to contract receipt as on 31.03.2017 relating to AY 2017-18 is also matching the sales value shown by the assessee with that of ledger and profit & loss account as on 31.03.2017 at pages 3 & 18 of the paper book respectively.
I note that the material evidence referred to by the ld. AR before this Tribunal is only in respect of balance sheet, profit & loss account and Form 26AS for AY 2016-17 and 2017-18. Admittedly, there is no dispute that the Assessing Officer is, one and the same for both the AYs and the return of income for AY 2017-18 was filed much before passing of assessment order which establishes the relevant details referred to by the ld. AR were available before the Assessing Officer. Therefore, I find no force in the arguments of the ld. DR in remanding the matter to the file of the Assessing Officer for verification since the entries in Form 26AS and profit & loss account clearly matching with reference to the contract receipt in respect of Chennai Radha Engineering Works Pvt. Ltd. Therefore, I find the order of the ld. CIT(A) in confirming the disallowance made by the Assessing Officer is not justified and the same is deleted. Thus, the grounds raised by the assessee are allowed.
In the result, the appeal filed by the assessee is allowed. Order pronounced on 09th September, 2025 at Chennai.