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Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI
Before: SHRI AMIT SHUKLA & SHRI PRASHANT MAHARISHI
The appeal in has been filed by the assessee against impugned order dated 29.12.2017, passed by Ld. CIT (A) Noida for the quantum of assessment passed u/s 143(3) for the assessment year 2011-12; whereas the appeal in 30.3.2016 in relation to the penalty proceedings u/s 271(1)(c) for the same assessment year 2011- 12. We will first take up the quantum appeal wherein the assessee has challenged the addition of Rs. 6,30,738/- on account of difference receipt shown by the assessee and in form 26AS.
The facts in brief are that the assessee is an individual who is deriving income from technical services provided to M/s. Ericson India Pvt. Ltd. for its various establishments situated throughout the country. In the return of income the assessee has declared total income of Rs. 73,58,540/- filed on 29.9.2011 by way of e-filing. The income disclosed by the assessee were in the form of salary income of Rs. 27,50,000/-; business income of Rs. 40,45,905/-; capital gain at Rs. 1,14,787/-; and income from other sources being interest income at Rs. 4,47,841/-. In the profit and loss account assessee has disclosed total receipt from technical services at Rs. 1,44,26,083/- and other income of Rs. 33,51,733/-. Against the said total receipt assessee has disclosed net profit of Rs. 47,19,559/-. The AO during the course of assessment proceedings on perusal of 26AS noted that receipts reflected in 26AS does not match with the details of receipts shown in the profit and loss account and accordingly notice u/s 133(6) was also issued to the M/s. Ericson India Pvt. Ltd.. In response EIPL has provided the consolidated details of payments made to the assessee at different locations and the copy of which was also given to the assessee for reconciliation. The difference in the accounts was only for amount of Rs. 6,30,738/-. The assessee’s reply before the AO was that the difference amounting to Rs. 6,30,738/- does not relate to him at all and has been wrongly shown by the M/s. Ericson India Pvt. Ltd. in its TDS return and they have also written to M/s. Ericson India Pvt. Ltd. for clarifying the difference that the details have not been provided to him so far. In absence of details coming forth from EIPL, assessee offered to tax the said difference. However, AO held that assessee’s reply is not convincing as in the reconciliation submitted, Assessee himself has worked out the difference of receipts of Rs. 6,30,738/- and looking to this discrepancy, he has added the same amount to the income of the assessee being suppressed receipts. Ld. CIT (A) too has confirmed the same.
Before us Ld. Counsel submitted that though before the AO the Ericson India Pvt. Ltd. could not give the clarification to the assessee and assessee had offered the receipts as income, however before the Ld. CIT (A) assessee has filed the entire reconciliation, a copy of which is appearing at pages 84 to 88 of the paper book. In the said reconcilation it was clearly pointed out that major amount of Rs. 4,03,940/- was a duplicate entry in 26AS and wrong data was uploaded by EIPL; and for the balance amount it was clearly brought on record that assessee has neither raised any invoices nor any payment has been made by the Ericson India Pvt. Ltd., but has wrongly been shown and uploaded by Ericson India Pvt. Ltd. in 26AS. Thus, no addition on account of difference could have been made. On the other hand Ld. DR strongly relied upon by the Ld. CIT (A) and AO.
We have heard the rival submissions and also perused the material referred to before us. The addition has been made solely on account of difference of receipts shown by Ericson India Pvt. Ltd. in 3 26AS and the receipts shown by the assessee in its books of account. The difference amount is of Rs. 6,30,738/-. Before the AO the assessee has produced all his books of accounts and also produced entire invoices and other bills. Without finding any discrepancy in such invoices AO has proceeded to make the addition on account of surplus receipts simply because the payer, i.e., Ericson India Pvt. Ltd. has uploaded the amount of payment in 26AS which does not tally with the assessee. From the perusal of the reconciliation statement, it is seen that assessee has given reconciliation of the following entries pertaining to four sites of Ericson India Pvt. Ltd. :- Transactio Amount as TDS as Remarks by the Branch/S n date as per Form per Form appellant ite per Form 26AS 26AS 26AS Bangalore 29.04.2010 403,940.00 40,394.00 Duplicate Entry in 26AS, wrong data uploaded by EIPL Jaipur 19.07.2010 11,963.14 1,197.00 Neither any invoices raised by appellant nor any payment made by EIPL, but reflected in 26AS, wrong data uploaded by EIPL Punjab 09.04.2010 186,480.00 18,648.00 --- do --- Delhi 19.07.2010 25,573.00 2,558.00 --- do --- 6,27,956.14 62,797.00 Diff 6,30,738.00
Apart from that it is seen assessee has given bill-wise explanation of various sites of Ericson India Pvt. Ltd., which has neither been considered by the Ld. CIT (A) nor same has been rebutted. The relevant explanation which is quite matching with the bills placed on the paper book is incorporated hereunder:- a) “Bangalore 4,03,940/- 29.4.2010 40,394/- • The appellant had Issued this bill bearing S. No 1198 dated 21.04.2010 to the Delhi site of EIPL and duly accounted for the same in its ledger account of Delhi site, copy of the said Invoice and copy of account of Delhi site as per the appellant books of account is enclosed (PB170 to 171 and 177 to 198) • As per form No. 26AS this TDS has been deducted by the Ericson India through its Bangalore branch and under TAN BLRE00544F while the invoice was raised on Delhi office so the bill is not appearing in the ledger of Bangalore site of the appellant . Copy enclosed. • As per the copy of the appellant combined ledger account submitted by the Ericson India Ltd. to the AO vide their letter dated 7-1-2014 , this bill is duly entered as bill no. 1198/10-11 on 29-4-2010, with doc. Date 10-4-2010 for Rs. 403938. • In 26AS this bill has been uploaded/entered by EPIL twice in the TDS details of Banglore Branch , one at S.No 26 transaction dated 15.06.10 and secondly at S.No 34 transaction dated 29.04.2010 while the date of booking is same for both entries i.e., 14.07.2010.
• In the books of the appellant this bill is booked only once (Delhi account) and in the combined account of the Ericson this bill is booked only once whereas the 26AS shows this bill twice resulting 5 in duplicacy of the entry' of the bill twice at the end of the Ericson which has caused enhanced professional charges to this extent, which made the AO to made the addition.
• There Is nothing on record to show that the wrong entry made by the Ericson Is In any way pertain to the appellant or the appellant has ever received this payment from the vendor.
• In view of the above facts the addition made to extent of Rs,403938 deserved to be deleted; b) Jalpur 11,963.14 19.7.2010 1,197/- • As per the copy of the appellant combined ledger account submitted by the Ericson India Ltd. • As per the copy of the ledger account of the Jaipur site (PB 199 to 202) there is no such bill or invoice issued by the appellant.
• As per the copy of the appellant combined ledger account submitted by the Ericson India Ltd. To the AO vide their letter dated 07-01-2014,this bill is also not appearing in their ledger account. Hence when this bill is also not booked by the Ericson India than. it is evident that it is a wrong entry on the part of Ericson and the submission of the appellant is correct.
• There is nothing on record to show taht ther wrong entry made by the Ericson is in any way pertain to the appellant or the appellant has ever received this payment from the vendor.
• In view of the above facts the addition made to extent of Rs, 11963 deserved to be deleted c) Punjab 1,86,480/- 09.04.2010 18,648/- • As per form No. 26AS this TDS has been deducted by the Ericson India from the Punjab site at TAN PTLE10136A at S.No. 17 .
• In the copy of the ledger account of three sites (Jammu, Mohali & Shlmla) under Punjab Group (PB 203 to 208) there is no such bill or invoice issued by the appellant.
• As per the copy of the appellant combined ledger account submitted by the Ericson India Ltd. To the AO vide their letter dated 7-1-2014 , this bill is also not appearing in their ledger account . Hence when this bill Is also not booked by the Ericson India than it is evident that it is a wrong entry on the part of Ericson and the submission of the appellant is correct.
• There is nothing on record to show that the wrong entry made by the Ericson is in any way pertain to the appellant or the appellant has ever received this payment from the vendor.
• In view of the above facts the addition made to extent of Rs, 186480 deserved to be deleted. d) Delhi 25,573/- 19.07.2010 2,558/- • As per form No. 26AS this TDS has been deducted by the Ericson India from the Delhi site at TAN DELE02715G at S.No. 2 • In the copy of the ledger account of two sites (Deihi & Gurgaon) under Delhi Group (PB 172 to 186 there is no such bill or invoice issued by the appellant. • As per the copy of the appellant combined ledger account submitted by the Ericson India Ltd. To the AO vide their letter dated 7-1-2014 , this bill Is also not appearing In their ledger 7 account . Hence when this bill is also not booked by the Ericson India than it is evident that it is a wrong entry on the part of Ericson and the submission of the appellant is correct. • There Is nothing on record to show that the wrong entry made by the Ericson Is in any way pertain to the appellant or the appellant has ever received this payment from the vendor. • In view of the above facts the addition made to extent of Rs. 25573 deserved to be deleted.”
Thus, in view of the aforesaid reconciliation which is also borne out from the records that an amount of Rs. 4,03,940/- is a duplicate entry in 26AS which has wrongly uploaded by Ericson India Pvt. Ltd. For the balance amount also it is seen that neither any invoices have been raised by the assessee nor any payment has been made by the EIPL, but has been wrongly reflected in 26AS. Any way in the entries made in the books by a third party cannot be held to be sacrosanct so as to draw any adverse inference against the assessee, when assessee has produced all the books of accounts, invoices and other documentary evidences. Thus, the approach of the revenue in simply making an addition based on difference in reconciliation from a third party’s book cannot be sustained. Accordingly, the addition made by the AO on account of suppressed receipts of Rs. 6,30,738/- is deleted. Consequently, appeal of the assessee is allowed.
Since penalty of Rs. 1,94,900/- u/s 271(1)(c) pertains to the same quantum addition, therefore, same is deleted, because we have already deleted the addition made in the quantum order.
In the result both the appeals of the assessee are allowed.