NITHYA MURTHY GENERAL CONTRACTORS,CHENNAI vs. ITO NON CORPORATE WARD 15(3), CHENNAI

आदेश /O R D E R

PER VIKRAM SINGH YADAV, ACCOUNTANT MEMBER:

was further submitted that ld.CIT(A) has erred in taxing the gross receipts as against the profit element embedded therein despite the specific contentions raised before him. In this regard our reference was drawn to para 4.3.1 of the ld.CIT(A)’s order which reads as under:-

4.3.1 During the assessment proceedings, the Assessing Officer noticed that there was a huge difference in gross receipt to the extent of Rs.87.01 lakhs between the payment reflected in TDS statement in Form No.26AS and the gross receipt reported in the P&L Account. After giving reasonable opportunity to the Appellant to file the reconciliation, the Assessing Officer resorted to assess the difference by applying the percentage of net profit declared by the Appellant in the P&L Account, as the Appellant could not file reconciliation. In spite of specific opportunity given to the ld.AR during his appearance on 04.06.2018(recorded in the Order Sheet), the reconciliation was not filed. Therefore, I am convinced that Appellant has no valid explanation for the gross receipt as mentioned above. Therefore, the Assessing Officer’s aforesaid addition is confirmed and the Appellant’s ground is dismissed.

2.1 Further our reference was drawn to para 3.3 of the assessment order which reads as under:-

“3.3 Difference in receipts when compared with Form 26AS.

During the course of scrutiny proceedings, it is noticed that the assessee was shown his receipts as Rs.98,96,555/- in the return of income. It is also noted from Form 26AS the gross receipts, is shown at Rs.1,85,98,428/-. The assessee was requested to furnish reconciliation of receipts between

Form 26AS and P&L A/c. The assessee did not submit the reconciliation statement with respect to 194C and 194J with Form 26As as requested. Even after repeated follow-up also the assessee has not provided any details nor substantiated their receipts. In the absence of any details provided by the assessee, the above difference amount of Rs.87,01,873/- is added as undisclosed income of the assessee for this year and brought to tax.”

However, we agree with the contention raised by the ld.AR that even where the differential has to be brought to tax, only the profit element embedded therein, could be brought to tax and not whole of the differential gross receipts. In the light of the same, we direct the Assessing Officer to apply the net profit declared by the assessee on the differential gross receipts, which can be brought to tax. The balance addition is hereby directed to be deleted.

3.1 In the result, this ground raised in the appeal is partly allowed for statistical purposes.

“5.3.1 The Assessing Officer has disallowed u/s.40(a)(ia) an amount of Rs.4.24 lakhs on the payment of loading and unloading, as the Appellant had failed to effect TDS on the said payment. Before the ld.CIT(A), the Appellant’s A.R submitted that the recipients had admitted the aforesaid payments in their return of income. During the appearance on 4.6.2018, the Appellant’s A.R was given specific opportunity to furnish supporting document in the prescribed form 26A from the recipient declaring that the above payments were reflected in their respective return of income. However, the Appellant has not submitted the same. Therefore, I am convinced that the Appellant has no valid objection to the Assessing Officer’s disallowance and therefore, the aforesaid disallowance is upheld and the Appellant’s ground is dismissed.”

We do not see any infirmity in the above cited findings of the ld.CIT(A) and the ground so raised by the assessee is hereby dismissed.