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Facts
The assessee, a corporate entity in the Entertainment Industries, filed its return declaring NIL income but a book profit of Rs.1,49,65,787/- under section 115JB. During assessment, a difference of Rs.37,13,011/- was noted between income offered and Form-26AS. The Assessing Officer added this amount back, which was sustained by the CIT(A).
Held
The Tribunal noted that the delay in filing the appeal was condoned as it was due to a reasonable cause. It was also observed that Ground No.2 was dismissed as not pressed. The main issue concerned the mismatch between income offered and Form-26AS, which the assessee claimed was due to a difference in booking income and TDS as per their accounting system versus the payees'.
Key Issues
Whether the addition of Rs.37,13,011/- on account of mismatch between income offered and reflected in Form-26AS is justified.
Sections Cited
115JB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Per Saktijit Dey, Vice President:
This is an appeal by the assessee against order dated 15.04.2025 passed by learned Commissioner of Income Tax (Appeals) [in short the ‘CIT(A)’], Mumbai for the Assessment Year 2011-12.
There is delay of 122 days in filing the appeal. Having considered rival contentions, we are satisfied that delay in filing the appeal was due to reasonable cause. Hence, we condone the delay and admit the appeal for adjudication on merits.
At the outset, learned counsel appearing for the assessee, on instructions, did not press Ground No.2. Accordingly, Ground No.2 is dismissed as not pressed.
The only other surviving issue relates to addition of an amount of Rs.37,13,011/- on account of difference between income offered by the assessee and as reflected in Form-26AS.
Briefly the facts are, the assessee is a resident corporate entity carrying on activities in Entertainment Industries. For the assessment year under dispute, the assessee filed its return of income on 28.12.2011, declaring NIL income under normal provisions and book profit of Rs.1,49,65,787/- u/s. 115JB of the Income Tax Act, 1961 (in short the ‘Act’). In course of assessment proceeding, the Assessing Officer, based on information available in the ITAT system found that as against the TDS and corresponding income reflected in Form-26AS, the income declared by the assessee is lesser and there is a difference to the tune of Rs.37,13,011/-. He, therefore, called upon the assessee to reconcile the difference. Though, the assessee furnished its submissions stating that there is no difference as such. However, the Assessing Officer was not convinced. Ultimately, he added back the amount of Rs.37,13,011/-. Though, the assessee contested the addition before learned First Appellate Authority, however, it was sustained.
Before us, learned counsel appearing for the assessee submitted that in course of proceeding before learned First Appellate Authority, the assessee had furnished a detailed reconciliation of difference between the income offered and income reflected in Form-26AS. He submitted, the major difference was on account of receipts from Zee Entertainment amounting to Rs.33,63,403/-. He submitted, the difference between the income offered and reflected in Form-26AS is on account of the fact that the assessee follows an accounting system whereunder bills are issued on finalization of work on approval basis and income is accordingly booked. Whereas, the payees have deducted TDS as per their cost provision. In this context, he drew our attention to the statement of fact forming part of Form-35 furnished to CIT(A). Thus, he submitted, while the payees have booked the cost in A.Y. 2011- 12, the assessee has offered the corresponding income in AY 2012-13.
The learned Departmental Representative (DR) relied upon the observations of the Departmental Authorities. However, he submitted assessee’s claim can be factually verified by the AO.
Having considered rival submissions and perused the materials on record, we find that the issue of mismatch between income offered by the assessee and income reflected in Form-26AS arises out of non-appreciation of the reconciliation statement furnished by the assessee. It is the say of the assessee that the so-called differential income has been offered by the assessee in A.Y. 2012-13, as against booking of such income by the TDS deductees in A.Y. 2011-12. In our view the issue can be put at rest through proper factual verification of assessee’s claim, which has not been done either by the Assessing Officer or by learned First Appellate Authority. In view of the aforesaid, we are inclined to restore the issue to the file of the Assessing Officer for factual verification of assessee’s claim. In case the claim of assessee that the differential amount has been offered to tax in AY 2012-13 is found to be correct, the addition should be deleted.
In the result, appeal is allowed for statistical purposes.