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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: HON’BLE SHRI MAHAVIR SINGH & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member)
Aforesaid appeal by Revenue for Assessment Year (AY) 2015-16 arises out of the order of learned Commissioner of Income Tax (Appeals)-12, Chennai [CIT(A)] dated 26.12.2018 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 27.12.2017. The grounds raised by the Revenue read as under:
1. The order of the learned CIT(A) is contrary to law and facts and circumstances of the case.
2. The Id. CITA) erred in deleting the addition made by the Assessing Officer of Rs.7,28,47,981/- being mismatch in receipts as per 26AS & P & L account. 2.1 The Id. CIT(A) erred in not considering the fact that the onus is on the assessee to explain the difference in receipts as per Form 26AS and P & L account. 2.2 The Id. CIT(A) erred in not considering the fact that the assessee has not furnished any evidence in supported of his claim that there has been overlapping of entries and filing of incorrect entries by the Corporation of Chennai. 3. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing Officer be restored.
As evident, the revenue is aggrieved by deletion of addition of Rs.728.47 Lacs as made by Ld. AO in the assessment order in view of the fact that there was difference in receipts as per Form 26AS and assessee’s Profit & Loss Account. The registry has noted a delay of one day in the appeal which we condone and proceed with adjudication of the appeal on merits.
The Ld. Sr. DR, drawing attention to the findings of Ld. AO, assailed the relief granted by Ld. CIT(A) in the impugned order. The Ld. AR, on the other hand, drew attention to the letter of Ld. AO dated 21.09.2021 and supported the impugned order. Having heard rival submissions, our adjudication would be as under. Assessment Proceedings 3. The assessee being resident individual engaged as civil contractor was assessed u/s. 143(3) wherein certain difference in business receipts as reported in Form 26AS and as reflected by the assessee in the profit & Loss Account was noted. The assessee tabulated the differences and submitted that amounts were overbooked by the deductor. In few cases, the amounts pertaining to AY 2014-15 were stated to be credited during this year. The Ld. AO collected information u/s 133(6) from Corporation of Chennai, Storm Water Drainage Department, Zonal Office-1 & 14 on the basis of which Ld. AO rejected the plea of the assessee. Finally, Ld. AO computed difference of Rs.728.47 Lacs and added the same to the income of the assessee. The same was in respect of following municipality: - No. Name Amount (Rs.) 1. Alandur Municipality 15,16,459/- 2. Corporation of Chennai- SWD 2,31,34,437/- 3. Engineering Section Zone-1 14,92,805/- 4. Zonal Office-XIV 4,67,04,280/- Total 7,28,47,981/- Appellate Proceedings 4.1 During appellate proceedings, the assessee reiterated its stand and submitted that there was no concealment of contract receipts. The difference arises since the contract were running over more than one year when there was a possibility of overlapping in the department accounting and filing of Form 26AS. 4.2 The Ld. CIT(A), after considering the assessee’s submissions and replies received from various municipalities arrived at difference of Rs.3.06 Lacs. With respect to Alandur Municipality, it was noted that the amount was wrongly accounted for by the municipality in Form No.26AS. With respect to Corporation of Chennai, SWD, the receipts were tabulated in para-10 and only a difference of Rs.7266/- was noted. The figures as reported by Engineering Section Zone-1 were found to be tallying with the books of accounts. A difference of Rs.2,99,073/- was noted with respect to Zonal Office-XIV. It was finally concluded that the assessee had not concealed any contract receipts. In fact, there was no possibility of such concealment since the payment was made as per the tender agreed prices. The differences arose due to the fact that the contract was running over more than a year which may give rise to reconciliation differences. Accordingly, the impugned additions were restricted to Rs.3.06 Lacs. Aggrieved, the revenue is in further appeal before us. Our findings and Adjudication 5. We find that the assessee is a civil contractor and work for various municipalities. The contract is received under tenders at agreed prices. These contracts usually span over more than a year which give rise to reconciliation differences. The findings of Ld. CIT(A), in this regard, could not be faulted with. The Ld. CIT(A), has reconciled the figures of each department and arrived at concrete findings that there was merely a difference of Rs.3.06 Lacs only. These findings remain undisturbed before us except for figures of Zonal office-XIV.
So far as the quantum of difference in the figures of Zonal Office XIV is concerned, we find that Ld. AO, in letter dated 21.09.2021 as filed by Ld. Sr. DR, has reported the factual position as under: - 5. From the records it is seen that the confirmation obtained from Perungudi Zone Office, XIV certified that contract receipts during the year was Rs.24,71,28,480/- and the assessee in his P & L Account admitted the same. The assessee has claimed that Rs.313616407/- shown in 26AS relates to works for AY 2014-15. However, it is seen that Perungudi Zone Office, XIV has revised TDS to Rs.275056200/-. Hence this difference now is 2,79,27,728/- as against Rs.4,67,04,280/- added by the then AO. Taking the sum of Rs.19783647/- has been admitted in AY 2014-15 there is shortfall in admission of income to the tune of Rs.2595408/- even after considering that the income has been split over two years as per accounting standards. A copy of the reconciliation statement for AY 2014-15 and AY 2015-16 submitted by the assessee available on file is enclosed for perusal. It could thus be seen that Perungudi Zonal office has revised TDS return and as per Ld. AO, the difference with respect to this Zonal office narrows down to Rs.25,95,408/-. The Ld. CIT(A) has restricted the addition with respect to this Zonal Office to the extent of Rs.2,99,073/-.
5 - Therefore, the remaining unreconciled amount is nothing but the differential of the two i.e., Rs.22,96,335/- which would be further added to the income of the assessee. The Ld. AO is directed to add back this amount to the income of the assessee and recompute the income. We order so. 7. The appeal stands partly allowed.
Order pronounced on 08th June, 2022.