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Income Tax Appellate Tribunal, BANGALORE BENCHES “SMC-A”, BANGALORE
Before: Shri George George K
O R D E R This appeal at the instance of the assessee is directed against CIT(A)’s order dated 29.07.2019. The relevant assessment year is 2015-2016.
The solitary issue argued was whether the CIT(A) has erred in confirming the addition made by the Assessing Officer due to mismatch of turnover as per the return of income filed by the assessee vis-à-vis the turnover appearing in Form 26AS.
The brief facts of the case are as follow: The assessee is a private limited company, engaged in the business of colour dying on job work basis. For the assessment year 2015-2016, the return of income was filed declaring loss of Rs.31,452. The assessment was taken up for scrutiny by issuing of notice u/s 142(1) of the I.T.Act. During the course of M/s.Akshay Colour Dyeing Pvt.Ltd.
assessment proceedings, the A.O. noticed that there was difference of turnover in the return of income filed and Form 26AS, which amounted to Rs.10,43,500. The assessee was asked to reconcile the difference. The assessee submitted that the total job work undertaken for M/s.Bharat Silks for the relevant assessment year was only Rs.54,07,405 and not Rs.64,50,905 reflected in Form 26AS. It was submitted that the credit note to the extent of Rs.10,43,500 towards defects in quality of dyeing, colour variation etc. are duly accounted in the books of account of the debtor / customer. However, unfortunately the said debtor / customer has not filed revised TDS return for the reason that the entire TDS amount was remitted on the basis of provisional bill raised by the assessee and also on the wrong presumption that they may not get the refund amount of the said TDS. The assessee also filed confirmation letter from the debtor / customer, viz., M/s.Bharat Silks. The A.O., however, rejected the contentions of the assessee by observing that – “3.01……….. The debtor had comfortable time to revise the TDS return, but did not do so. In the circumstances of the case, it is construed that the assessee exercised to avoid the receipts for taxation. However, the case, the assessee will take such stand only if the debtors revise the return of TDS.” Therefore, the A.O. added a sum of Rs.10,43,500.
Aggrieved by the order of the CIT(A), the assessee has filed appeal to the first appellate authority. The CIT(A) confirmed the M/s.Akshay Colour Dyeing Pvt.Ltd.
addition made by the A.O. The relevant finding of the CIT(A) reads as follow:-
“4. The appellant has also not explained as to why the customer having received the credit note dt 31.03.2015, did not revise the TDS Return to rectify the transaction recorded. Considering all the above, I am of the view that the appellant failed to establish the genuineness of the transaction to rebut the findings given by the AO in para 3.0 to 3.02 of the impugned order. Consequently, I confirm the action of the AO in this regard, while dismissing the various grounds raised by the appellant.”
5. Aggrieved by the order of the CIT(A), the assessee has filed this appeal before the Tribunal. The assessee has filed a paper book enclosing therein the confirmation letter of M/s.Bharat Silks (the debtor / customer of the assessee) and other documents placed before the Income Tax Authorities. The learned AR stated that the revised TDS return has been filed by M/s.Bharat Silks showing the correct turnover of Rs.54,07,405. However, it was stated that necessary documents showing the same was not given, hence, the matter may be restored to the A.O. for his examination.
The learned Standing Counsel appearing for the Department, relied on the orders of the Income Tax Authorities.
I have heard the rival submissions and perused the material on record. The learned AR submits that M/s.Bharat Silks has filed the revised TDS return disclosing the correct turnover of Rs.54,07,405. If the statement of the learned AR is true, the same would be reflected in Form 26AS. In the interest of justice and equity, I am of the view that the matter should
M/s.Akshay Colour Dyeing Pvt.Ltd. be examined by the Assessing Officer. Accordingly, the issue is restored to the files of the A.O. The A.O. is directed to examine whether Form AS26 discloses the correct turnover as that of the turnover disclosed in the return of income filed by the assessee. It is ordered accordingly.
In the result, the appeal filed by the assessee is allowed for statistical purposes.