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Income Tax Appellate Tribunal, BANGALORE BENCHES “C”, BANGALORE
Before: Shri Chandra Poojari, AM & Shri George George K, JM
O R D E R
Per George George K, JM
This appeal at the instance of the assessee is directed against CIT(A)’s order dated 04.12.2018. The relevant assessment year is 2014-2015.
There is a delay of 180 days in filing this appeal. The assessee has filed an affidavit of Mr.Arinjoy Ghosh stating therein the reasons for the belated filing of this appeal. We have perused the reasons stated in the affidavit for belated filing of the appeal. We are of the view that there are sufficient cause for filing this appeal belatedly and no latches can be attributed to the assessee. In the facts and circumstances of the case, we condone the delay for 180 days and proceed to dispose of the appeal on merits.
The grounds raised read as follow: “1. The learned CIT(A) has erred in passing the order in the manner which he did.
. M/s.Axiscades Aerospace and Technologies Pvt.Ltd.
2. The learned CIT(A) has erred in adding the TDS amount without appreciating the explanation of the appellant.
3. The learned CIT(A) erred in not appreciating that M/s.Thales had accounted the amount of TDS only in May 2014, dated 20.05.2014. 4. The learned CIT(A) has erred in not taking into consideration that as per the 26AS, the date of booking was 20.05.2014. 5. Without prejudice, the appellant having explained that the income was accrued and received only during the financial year relevant to the assessment year 2015-2016, the said addition is bad in law to have been added for the assessment year 2014-2015, the addition is liable to be deleted. 6. The learned CIT(A) erred in law by presuming that the entire receipt was an income for the assessment year 2014- 15. 7. Without prejudice, the disallowance is excessive, arbitrary, unreasonable and out to be deleted in toto. 8. The learned CIT(A) erred in allowing the interest levied by the A.O. u/s 234B and 234C of the Act. 9. For these and other grounds that may be urged at the time of hearing of the appeal, the appellant prays that the appeal may be allowed.”
Brief facts of the case are as follow: The assessee is a company engaged in the business of providing mechanical, electrical and electronics in the manufacturing industry. For the assessment year 2014-2015, the return of income was filed declaring total income of Rs.13,55,80,490. The assessment was taken up for scrutiny and requisite notice u/s 143(2) of the I.T.Act was issued on 28.08.2015. The assessment was completed u/s 143(3) of the I.T.Act vide order dated 30.12.2017. The Assessing Officer made an addition of Rs.13,45,44,905 in the assessment order completed u/s 143(3) of the I.T.Act. The reason for the . M/s.Axiscades Aerospace and Technologies Pvt.Ltd. addition was that as per Form No.26AS, the assessee ought to have reported a receipt of Rs.68,22,14,537 on which TDS was shown at Rs.6,80,29,759, whereas the assessee had claimed credit for TDS of only Rs.5,45,75,264. Therefore, the A.O. noticed that the assessee has not claimed credit of TDS made to the extent of Rs.1,34,54,495. Accordingly the receipt / income towards unclaimed TDS amounting to Rs.13,45,44,950 was added to the total income.
Aggrieved by the addition of sum of Rs.13,45,44,950 as income, the assessee filed an appeal to the first appellate authority. Before the first appellate authority, it was contended that to the extent of income added in the current year amounting to Rs.13,45,44,950 was disclosed as income in the subsequent year and accordingly differential TDS of Rs.1,34,54,495 was also claimed as credit for the subsequent assessment year, namely, A.Y. 2015-2015. It was stated by bringing to tax the amount of Rs.13,45,44,950 as income for assessment year 2014-2015, it tantamount to double taxation. It was submitted that the assessee has accounted for the revenue on completion of deliveries as per Accounting Standard AS-9. The CIT(A) rejected the objections raised by the assessee and confirmed the view taken by the Assessing Officer. The relevant finding of the CIT(A) reads as follows:-
“5.2.1 In view of the above submission, I have perused the records to find that the appellant has raised the invoices in respect of the amount (revenue) included by the clients as income on which TDS has been made by the clients treating the same as having been completed. The said invoice is dated 3.4.2014 and the total value of the contract happens to be of Rs.13,45,44,950 and it is pertinent to mention that between 01.04.2014 to 03.04.2014 the appellant could not have completed such a huge work, hence, it can be safely
. M/s.Axiscades Aerospace and Technologies Pvt.Ltd. concluded that the said work was rightly treated by the clients as having been completed during the financial year 2014-15 (AY 2015-16), even though the invoices were raised on 03.04.2014 falling in the next financial year by the appellant. Thus, effectively the revenue should have been offered to tax in the current financial year. Raising of invoices on 03.04.2014 is a unilateral decision taken by the appellant and should not be emphasized much. Considering the volume of work and also considering the fact that the client has recognized the said amount as work done by the appellant, I am of the view that the revenue pertains to the financial year 2013-14 corresponding to the Asst. Year 2014-15. In view of the above, the action of the AO is confirmed in this regard.”
Aggrieved by the order of the CIT(A), the assessee has filed this appeal before the Tribunal. The learned Counsel for the assessee reiterated the submissions made before the Income Tax Authorities.
The learned Departmental Representative has filed a brief written submission essentially supporting the findings of the A.O. and the CIT(A).
We have heard rival submissions and perused the material on record. An amount of Rs.13,45,44,905 has been added to the income by the A.O. on account of TDS deducted by the deductor for the financial year relevant to the assessment year 2014-2015. According to the assessee, this is an advance payment made by the deductor for the work which was ongoing. The assessee on its part had considered this as income for the assessment year, namely, A.Y. 2015-16 based on the completion of the work. The A.O. has not commented whether the assessee has declared the impugned income in the subsequent assessment year. The assessee has reconciled the difference of income by stating that the invoices raised by the deductor is only an advance and the actual
. M/s.Axiscades Aerospace and Technologies Pvt.Ltd. completion of work / deliveries is only in the subsequent year, namely, A.Y. 2015-2016. It is a settled position that income cannot be added merely on account of difference in figures of return of income and the figures shown in AS-26. [Refer the order of the ITAT Delhi Benches in the case of ACIT v. Rajiv Nayar in (order dated 26.03.2018)]. The ITAT Mumbai Benches in the case of Smt.Varsha Solanki reported in 280 ITR 55 (AT) Mumbai, had held that when assessee had billed for services rendered in March after the close of the accounting year, no addition to the income is permissible on the basis of TDS certificate subsequently received. It was further held by the Mumbai Bench of ITAT (supra) that the TDS amount is to be claimed in the subsequent assessment year.
8.1 In the instant case, as mentioned earlier, the A.O. has not examined whether the impugned income has been disclosed by the assessee in the subsequent assessment year, namely, A.Y. 2015-2016. If the assessee has recognised the income in the subsequent year based on completion of delivery and raising of invoices, addition in this assessment year would tantamount to double taxation. If the deductor has deducted tax for the advance payment and not on completion of work, the impugned amount cannot be added as income of the current assessment year, namely, A.Y. 2014- 2015. On the other hand, if impugned income is seen to have been accrued in A.Y. 2014-2015, then the same income if disclosed for A.Y. 2015-2016 needs to be excluded for the simple reason that income cannot be taxed twice. We are of the view that the entire issue needs to be considered afresh by . M/s.Axiscades Aerospace and Technologies Pvt.Ltd. the A.O. Therefore, the case is restored to the files of A.O. The A.O. is directed to afford a reasonable opportunity of hearing to the assessee before a decision is taken in the matter. It is ordered accordingly.
In the result, the appeals filed by the assessee is allowed for statistical purposes.
Order pronounced on this 04th day of August, 2021.