M/S. ICON TELENET ENGINEERING PVT. LTD.,BENGALURU vs. INCOME TAX OFFICER, WARD 11(2), BENGALURU

O R D E R Per Shri A.K. Garodia, Accountant Member This appeal is filed by the assessee which is directed against the order of ld. CIT (A)- 3, Bangalore dated 31.03.2017 for Assessment Year 2011-12.

by the assessee are as under. “The Appellant objects to the order of the Ld. CIT (A) on the following grounds that:

1. The impugned order is opposed to the facts and law in so far as it is prejudicial to the interest of the Appellant.

2. The Ld.CIT(A) erred in upholding the AO's decision of treating the amount stated in Form 26AS as the income of the appellant and in doing so: a) The Ld.CIT(A) failed to appreciate the fact that the amounts reflecting in the Form 26AS is entered by the customers of the Assessee and is beyond the control of the Assessee. b) The Ld.CIT(A) failed to appreciate the fact that the invoices issued by the Assessee were matching with the Profit and Loss Account and the bank statement provided by the Assessee.

3. It was submitted by ld. AR of assessee that the addition has been made by the AO on the basis of difference in gross receipts of the assessee as per assessee’s books and as per form no. 26AS but the gross receipt as per Form 26AS cannot be adopted without considering the various reasons for it being different than the receipts as per the books of accounts of the assessee because there are various reasons for such differences. He pointed out that sometimes, the payer adopts different method of accounting as compared to the recipient i.e. the present assessee and for this reason, there may be difference in the amounts of gross receipts as per the assessee being recipient and form no. 26AS. It is also submitted that TDS is deducted by the payer on the gross amount including taxes & duties whereas, the assessee recipient accounts for its receipts in its P&L account by excluding duties and taxes. At this juncture, it was pointed out by the bench that the assessee has not furnished reconciliation statement for difference before AO and CIT (A). The bench wanted to know whether any such reconciliation is filed before the Tribunal. He submitted that the assessee prepared a summary of sales for Assessment Years 2010-11, 2011-12 and 2012-13 as per form 26AS and as per books of assessee and from the same, it can be seen that in Assessment Year 2011-12 i.e. in the present year, the amount of gross receipts as per form 26AS is higher than such amounts as per books of assessee but in Assessment Year 2010-11 and 2012-13, the amount of gross receipts of assessee as per books of assessee is higher than the amount as per form 26AS of those two years and therefore, in the interest of justice, one more opportunity may be provided to assessee to furnish the reconciliation statement. The ld. DR of revenue submitted that sufficient opportunity was provided to the assessee and therefore, the assessee does not deserve any further opportunity and since no reconciliation statement was provided by the assessee, the addition made by the AO and confirmed by CIT(A) should be approved.

4. We have considered the rival submissions and we find that as per summary of sales for Assessment Years 2010-11, 2011-12 and 2012-13 submitted by assessee before us, the receipts shown by assessee as per books of assessee for Assessment Years 2010-11 and 2012-13 are more than the receipts for those two years as per form 26AS although for the present year 2011-12, the receipts shown by assessee as per books of accounts is less than the receipts as per form 26AS. It is also seen that for the present year, the addition made by the AO is Rs. 68,47,801/- and as per Para 4.2 of order of CIT(A), as per form 26AS, the receipt from Idea Cellular Limited is of Rs. 64,53,546/- and the receipt from Huawei Telecommunications (India) Company (P) Ltd. is Rs. 1,53,77,999/-, total receipt as per form 26AS is Rs. 2,18,31,545/- and in the same para no. 4.2 of order of CIT(A), it is stated that the assessee has shown receipt of only Rs.1,49,83,744/- and the addition made by the AO of Rs. 68,47,801/- the difference between these two amounts of Rs. 2,18,31,545/- and Rs. 1,49,83,744/-. As per the summary of sales submitted by assessee before us, it is seen that if the sales including duties and taxes as per books of accounts of assessee is considered, such sales as per books of accounts of assessee is Rs. 1,64,33,879/- and even if that sale figure is adopted, the difference between the gross receipts as per assessee’s books and form 26AS will be lesser. Hence in our considered opinion, in the interest of justice, one more opportunity should be provided to assessee for furnishing the required reconciliation and hence, we set aside the order of CIT(A) and restore the matter back to the file of AO for fresh decision with the direction that assessee

should furnish the required reconciliation and thereafter, the AO should decide the issue afresh after providing reasonable opportunity of being heard to assessee.

Order pronounced in the open court on the date mentioned on the caption page.