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Income Tax Appellate Tribunal, CHANDIGARH BENCHES, ‘SMC’, CHANDIGARH
Before: SHRI N.K. SAINI
This is an appeal by the Assessee against the order dt. 29/11/2017 of Ld. CIT(A)-2, Chandigarh.
The only grievance of the assesee in this appeal relating to the sustenance to addition of Rs. 5,66,350/-made by the Assessing Officer on account of difference in turnover in service tax return.
Facts of the case in brief are that the assessee filed his return of income on 02/07/2014 declaring in income of Rs.6,26,770/- after claiming deduction of Rs. 1 Lac under Chapter-VI, later on the case was selected for scrutiny.
The Assessing Officer during the course of assessment proceedings noticed that as per the audit report of the assessee the gross receipt from transport business was shown at Rs. 6,19,15,008/- whereas figure shown before the service tax authority were at Rs. 6,35,64,730/-. Thus there was difference of Rs. 16,49,722/-.
The Assessing Officer asked the assesee to reconcile the same. In response, the assessee submitted that the request had been filed with Service Tax Department for the correction of the figure relating to gross receipt and that the assessee was a transporter, there were no tax implication on the assessee as according to “Reverse Charge Mechanism Rule”, the service tax liability was only on Consigner and Consignee of the goods. The Assessing Officer however, did not find merit in the submissions of the assessee and
applied the GP rate 34.33% on the aforesaid difference of Rs. 16,49,722/-. Accordingly the addition of Rs. 5,66,350/- was made.
Being aggrieved the assessee carried the matter to the Ld. CIT(A) and submitted that as some error had creeped in while furnishing half yearly service tax return for the period April 2013 to September 2013 which was later rectified and correct figure was reported to the service tax authorities.
It was also stated that the higher figure of turnover was due to clerical error. The Ld. CIT(A), however, did not find merit in the submissions of the assessee and observed that assesee did not make any effort to correct this mistake in time in so far as the higher figure was reported for the period April 2013 to September 2013, and the letter for the correction was filed on 15/01/2016 i.e; after 2years and 4 months which was filed only after the suppression of turnover was detected by the Assessing Officer during the assessment proceeding. He also observed that the assessee was in the transport business wherein many receipts were in cash and suppression of turnover could not be ruled out. Accordingly the addition made by the Assessing Officer was sustained.
Now the assessee in appeal.
Ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that there was difference in the figures mentioned in ST-3 Return field in the year 2013-14 and correct figure was pointed out to the Service Tax Authority, reference was made to page nos. 1 & 2 of the asessee’s paper book. It was contended that assessee was not liable to pay any service tax which was a liability of Consigner or Consignee. Therefore the addition made by the Assessing Officer and sustained by the Ld. CIT(A) was not justified.
In his rival submissions Ld. Sr. DR strongly supported the orders of authorities below and reiterated the observations made therein.
I have considered the submissions of both the parties and perused the material available on record. In the present case, it is noticed that the assessee vide letter dt. 15/01/2016 informed the Superintendant of Service Tax Range 1, Chandigarh that an incorrect amount was furnished in Form ST-3. It is also an admitted fact that the Assessing Officer made the addition on the basis of the difference in figures mentioned in Service Tax Return and Audit Report. However
it is not clear as to whether the figure furnished by the assessee to the Service Tax Department were accepted and if accepted as to whether there was difference in figures mentioned in Service Tax Return and reported in Audit Report. I therefore, considering the totality of the facts, deem it appropriate to set aside this issue back to the file of the Assessing Officer to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee.
In the result appeal of the Assessee is allowed for statistical purposes.
(Order pronounced in the Open Court on 18/02/2019)
Sd/- (N.K. SAINI) VICE PRESIDENT Place: Chandigarh Dated : 18/02/2019 AG Copy to: The Appellant, The Respondent, The CIT, The CIT(A), The DR