MR.SWARUP DUTTA,HOWRAH vs. I.T.O.,WARD-48(4), KOLKATA

The assessee’s only grievance raised in the instant appeal challenges the correctness of both the lower authorities’ action making undisclosed receipt income addition of Rs.19,98,442.76/- on account of difference between the corresponding TDS details and his income tax return. Case file suggests that this assessee is a clearing agent running business in the name and style of M/s Dutta Clearing Agency. The details as per TDS certificate stated gross receipts of Rs.1,28,76,711.24 in case of M/s Calcutta Marine Engg. (P) Ltd. and M/s Marshall Corpn. Ltd.; respectively. The assessee’s return admittedly had disclosed income of Rs.1,08,78,262.48/-. Both the learned lower authorities proceeded to add the differential amount of Rs.19,98,442.76 as undisclosed receipts thereof during the assessment as well as in the lower appellate proceedings.

We have heard rival contentions against and in support of the impugned addition. We find that the assessee’s reply dated 26.12.2006 submitted to the Assessing Officer in furtherance to section 142(1) notice dated 11.09.2006 had explained the difference between the alleged gross receipts as per TDS record and income tax return as under: “It is relevant to income for the year please be apprise that a sum of Rs. 1,08,78,262.48 has been credited to Profit & Loss A/c which is gross value of bills raised towards Material Handling Charges during the year though the amount received from debtors as imparted in our books of accounts is including the balances B/F from preceding years as depicted hereunder: Particulars Op. Bal. As Bill raised TDS Total (2+3- Received Balance as on 01.04.98 during the deducted 4) during the on 31.03.99 year @ 1% year (5-6) Calcutta 3409,519.67 4776,711.24 47,767.00 8138,463.91 8119,000.00 19,463.91 Marine & Engg. Co. Pvt. Ltd. Marshall 385,782.15 4776,711.24 47,767.00 5114,726.39 3081,900.00 2032,826.39 Corp. Ltd. Vishnu 584,220.00 97,500.00 680,745.00 260,000.00 421,720.00 Cotton Mills Others 1227,340.00 1227,340.00 1227,340.00 Total 10878262.48 As revealed in above column we would like to draw your kind attention to the fact that TDS Certificate has been issued by Calcutta Marina & Engg. Co. Pvt. Ltd. in favour of us on payment basis i.e. on Rs. 8100,000/- which is absolutely including our outstanding balance of preceding years which has already been effected in earlier relevant years, statement of debtors for the AY 1998-99 is cited below and copies of A/cs enclosed for your ready reference: Particulars Op. Bal. As Bill raised TDS Total Received Balance as on 01.04.97 during the deducted (2+3-4) during the on 31.03.98 year @ 1% year (5-6) Calcutta 1736,952.90 2351,481.77 23,515.00 4064,919.67 655,400.00 3409,519.67 Marine & Engg. Co. Pvt. Ltd. Marshall 404,979.38 2351,481.77 23,515.00 2732,946.15 2347,164.00 385,782.15 Corp. Ltd. Vishnu 584,220.00 584,220.00 584,220.00 260,000.00 584,220.00 Cotton Mills Srestha 1260,542.44 6,250.00 1254,292.44 743,750.00 510,542.44 Cotton P. Ltd. Total 5287,183.54

Learned Departmental Representative fails to dispute that neither the Assessing Officer nor the CIT(A) have rebutted the assessee’s clinching plea that the issue in question in respect of above-stated two entities pertains to bill raised during the year and the taxpayer had disclosed his outstanding balances of earlier years as income. We therefore hold that the impugned addition of Rs.19,98,442.76/- cannot be sustained. The same is directed to be deleted. The assessee succeeds in his sole substantive ground.

This assessee’s appeal is allowed.