KAUSHIKKUMAR J. SUREJA,,RAJKOT-GUJARAT vs. THE INCOME TAX OFFICER, WARD-1(3),, RAJKOT-GUJARAT

The grounds of appeal raised by the Assessee read as under:- “1. The Learned Commissioner of Income Tax(Appeals) has erred in law and facts in not considering the settled law that only 8% of contract receipt added of Rs.9,88,045/- was required to be taxed and balance ought to have been deleted. The addition needs suitable modification. 2. The learned Commissioner of Income Tax (Appeals) has erred in law and facts in confirming addition of Rs.9,88,045/- made by the ld. Assessing Officer on account of showing less contract receipt without taking in to consideration the explanation given by the appellant as well as the Accounting Standard 7 issued by the Chartered Accountants of India. The same needs deletion. 3. Without prejudice, the ld. CIT(A) has erred in law and facts in not considering that addition of Rs.9,88,045/- was already offered to tax in A. Y. 2006-07 and thus it became double addition and double taxation of the same amount in 2 different A.Ys. The addition needs deletion. 4. Without prejudice, the ld,. CIT(A) has erred in law and facts in not considering that addition of Rs.9,88,045/- was already offered to tax in A.Y. 2006-07 and thus it became double addition and double taxation of the same amount in 2 different A.Y.s and therefore the said addition should have been ordered for deletion in A.Y. 2006-07 when he has confirm the same in A.Y. 2005-06. The action of the Ld. CIT(A) needs correction. 5. Taking into consideration the legal as well as factual aspect no addition amounting to Rs.9,88,045/- ought to have been confirmed and only 8% of the same ought to have been directed to tax and balance ought to have been deleted following the settled law. The addition needs deletion accordingly. 6. The appellant craves leave to add/alter/amend and/or substitute any or all grounds of appeal before the actual hearing takes place.”

The brief facts of the case are that in this case, the assessee is a proprietor of M/s. Shreeji Construction Company engaged in the business of building construction and contract work.

The Ld. Assessing Officer of verification of the profit and loss account and the TDS certificates annexed with the Return of Income arrived at a difference in contract receipt amounting to Rs.9,88,045/- . Thereafter, appellant was asked to explained the difference.

In pursuance to the said notice, assessee submitted that the amount of Rs.48,156/- pertains to service tax charged in bill as per the provisions of the service tax. However, the payee party has deducted the TDS on gross amount including the amount of service tax as per section 194C of the Act. With regard to contract receipt of balance amount of Rs.9,39,889/-, it was clarified by the assessee that the said receipt has been recorded in the F.Y.2005-06 relevant to A.Y. 2006-07 due to the reason that there was a dispute with the payee with whom the contract work was going on i.e. M/s. K. G. Intimate Ware Pvt. Ltd. The work undertaken by the appellant was disallowed since as per the opinion of the party, it was not as per the specification given in the contract and hence the said amount was not paid. However, the said amount was finally settled in the F.Y. 2005-06 and as per the Accounting Standard 7 issued by Chartered Accountants of India, the said receipt was shown in the books for the F.Y. 2005-06 relevant to the A.Y. 2006-07 and offered to tax by the appellant.

But Assessing Officer did not accept the explanation tendered by the appellant and made addition of Rs.9,88,045/- on account of showing less contract receipt.

Against the said order assessee preferred first statutory appeal before the ld. CIT(A) who passed an ex-parte order and confirmed the action of the ld. AO.

We have gone through the relevant record and impugned order. On behalf of the assessee, ld. AR moved an application for adjournment and same is declined, as there is no reason stated therein. We notice that Ld. CIT(A) has passed an ex-parte order in a summary manner and the appeal has dismissed in limine for non- prosecution. In the facts and circumstances of the case, we consider expedient in the larger interest of the justice, set aside the order of the ld. CIT(A) and send it back to the file of the Ld. CIT(A) to adjudicate the appeal afresh after giving an opportunity of being heard to the assessee. The assessee is also directed to extend fully co-operation with the ld. CIT(A) and comply with directions of CIT(A) for disposal of this appeal.

In the result, appeal filed by the assessee is allowed. This Order pronounced in Open Court on 10/05/2018