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Facts
The assessee, a contractor, challenged additions made by the Assessing Officer concerning alleged suppressed turnover of Rs. 97.15 lakhs and an unconfirmed sundry creditor liability of Rs. 10.50 lakhs. These additions arose from discrepancies found between reported contract receipts, Form 26AS, bank deposits from M/s Omni Projects (India) Ltd., and the unverified nature of the liability to M/s Shiv Shankar Trading Co. The CIT(A) had dismissed the appeal for lack of proper explanation and supporting evidence.
Held
The Tribunal observed that the assessee had not provided sufficient documentary evidence to substantiate claims of sub-contracting or to verify the sundry creditor balance before the lower authorities. While noting the assessee's repeated requests for adjournment and lack of preparedness, the Tribunal, in the interest of justice, remanded the case back to the CIT(A) to grant the assessee one final opportunity to present all necessary documentary evidence and proper explanations for the discrepancies.
Key Issues
Whether the additions for suppressed contract turnover and unverified sundry creditor liability are justified, and whether the assessee should be granted another opportunity to furnish evidence.
Sections Cited
Section 250, Section 143(3), Section 133(6), Rule 34(4) of Income Tax (Appellate Tribunal) Rules, 1963
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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: SH. MANOJ KUMAR AGGARWAL & SH. UDAYAN DASGUPTA
This appeal is filed by the assessee against the order of the ld. CIT(A) NFAC, Delhi dated 18.03.2024 passed u/s 250 of the Income Tax Act, 1961 which has emanated from the order of the DCIT/ACIT, Circle-4, Amritsar passed u/s 143(3) of the Act, dated 25.12.2018. the assessee relates to the addition of Rs.97.15 lakhs on account of alleged suppressed turnover and an addition of Rs.10.50 lakhs being alleged unconfirmed liability existing on A/c sundry creditors balance.
Brief facts emerging from records are that the assessee being a contractor has returned a short fall in contract receipts in comparison to the gross contract receipt reflected in Form No. 26AS.
It was further ascertained from the bank accounts that there is also a difference in bank deposits or credits flowing from such contract business received from the contractee M/s Omni Projects (India) Ltd. which amounts to Rs.5.59 crores (net after TDS) duly deposited in the assessee’s bank account with IndusInd Bank A/c No. xxxxx242013, which is more than the disclosed receipts of the assessee at Rs.4.68 crores.
It was further ascertained that an amount of Rs.10.50 lakhs being payable to sundry creditors M/s Shiv Shankar Trading Co. has remained unverified in absence of notice issued u/s 133(6) being returned unserved, which has resulted in an addition of Rs.1.07 crores to the total income.
The matter carried in appeal has been dismissed by the ld. first appellate authority in absence of proper explanation to various issues raised in course of information received from the contractee M/s Omni Projects (India) Ltd. The appeal has been dismissed on the grounds that the assessee has not been able to produce any supporting evidences to substantiate his claim that a certain part of the work has been given out on sub-contract basis and the assessee has also not been able to fully reply to the various discrepancies raised by the Assessing Officer in the assessment proceedings.
It was further noted that the assessee has not been able to fully justify the genuineness of the sundry creditors balance standing in the name of M/s Shiv Shankar Trading Co. and the said outstanding has remained unverifiable.
Now, the assessee is before the Tribunal on the grounds contained in the memorandum of appeal and during the course of hearing, the assessee has not filed any paper book nor any submission on merits of the case. The assessee has simply filed an adjournment application praying time for preparation of paper book.
Considering the materials on record and the issues contained in the memorandum of appeal, we find that various documentary evidences in support of the contention of allotment of part contract work sub-contractors are required in this case which also needs to be co-related with the deposits of contract receipts in bank account and subsequent payments to sub-contractors. Moreover, documentary evidences and being the sundry creditor of the assessee, which has remained unverified and the same will result in filing of fresh evidence.
We also find that the assessee has not availed the opportunities to represent the matter with full evidence before the ld. first appellate authority and has made half- baked submissions, which is not enough to prove and explain the difference arising out of the gross contract receipts from M/s Omni Projects (India) Ltd. and the corresponding contract offloaded to sub-contractors, as claimed by the assessee.
As such, we are of the opinion, that it will not serve any purpose to adjourn the case any further, considering the fact that adjournment has been granted to the assessee on previous occasions also. However, in the interest of justice, we allow the assessee one more opportunity to represent the case with full documentary evidences and submissions for proper explanation of the above discrepancies before the ld. first appellate authority.
As such, we remand the matter back to the files of the ld. CIT(A) with a direction to allow the assessee an opportunity to explain the case with documentary evidences and we direct the assessee to file all the documents he wishes to rely upon in support of his case and to fully cooperate with the ld. first appellate authority for proper disposal of the appeal.
The assessee should be allowed a reasonable opportunity of being heard.
We have not expressed any opinion on merits of the case and all legal issues are left open.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in accordance with Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 as on 10.12.2025