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Income Tax Appellate Tribunal, ‘D’ (SMC
Before: SHRI ABRAHAM P. GEORGE]
आदेश / O R D E R
Assessee through this appeal, which is directed against an order dated 30.06.2017 of ld. Commissioner of Income Tax (Appeals)- 2, Chennai assails an addition of �19,88,336/- made by the ld. Assessing Officer for difference in Form No.26AS and income admitted in the return filed by the assessee.
ITA No.2294 /Mds/2017. :- 2 -:
Facts apropos are that assessee an interior designer doing interior work mainly for telecom companies, had filed its return of income for the impugned assessment year disclosing income of �22,20,790/-. During the course of assessment proceedings, it was noted by the ld. Assessing Officer that contract receipts of the assessee as per Form No.26AS came to �3,53,68,385/- against which TDS u/s.194C of the Income Tax Act, 1961 (in short ‘’the Act’’) deducted by its clients was �7,07,387/-. It seems there was a disparity between the above amounts and what were shown by the assessee in its return of income. Assessee was required to file a reconciliation. Such reconciliation was duly filed by the assessee. Ld. Assessing Officer noted that viz-a-viz amounts shown in form No.26AS against M/s. Airtel M Commerce Services Ltd, M/s. Bharati Telemedia ltd, M/s. Bennet Property Holding Company ltd and M/s. Bharati Airtel ltd, assessee was unable to reconcile the difference. The corresponding income and TDS in respect of these parties came to �19,88,336/- and �39,826/- respectively. Addition of �19,88,336/- was made and assessment completed.
Aggrieved, assessee moved in appeal before the ld. Commissioner of Income Tax (Appeals) and ld. Commissioner of Income Tax (Appeals) held as under:-
ITA No.2294 /Mds/2017. :- 3 -:
‘’I find that the Assessing Officer has been fair and has taken into account the reconciliation produced by the appellant and has excluded all those cases where there is no difference and the TDS has been fully reconciled. It was only in respect of 3 parties wherein it was found that the TDS was not reconciled and one party wherein the table of reconciliation itself showed that no such sale had taken place, that the Assessing Officer has added back the receipts corresponding to the TDS, amounting to Rs. 19,88,336/-. In fact, in respect of M/s Bennet Property Holding Co. Ltd., wherein the appellant has claimed that no such sale has been made, but TDS has been done, the Assessing Officer has addressed a letter to the said concern to confirm the contracts executed by the assessee, payments and TDS done on the same, and pending reply from the said party, has added back the income corresponding to the unreconciled TDS of Rs. 7280/-. A perusal of the concerned Assessment folder shows that M/s Bennet Property Holding Co. Ltd. has furnished a reply dt. 18.1.2017 (subsequent to passing of Assessment Order) to the Assessing Officer, stating as follows:
Subject: Request for information u/s. 133(6) of the IT Act in the case of M/s Special Effect (AAWFS6409H) Ref: Your letter dated 20.12.2016 With reference to the above subject, this is to inform you that the contracts amounting to Rs. 24,44,659/- were carried out by the assessee (tn/s Special Effect) and TDS 48,939/-. was deducted of Rs. The difference TDS of Rs. 7,280/- has been deducted by us on a provision of Rs.3,64,000/-. Kindly find enclosed herewith the ledger account the of assessee as appearing in our books of accounts
In view of the facts contained in the reply, confirming that, contracts amounting to Rs. 24,44,654/- were ITA No.2294 /Mds/2017. :- 4 -: actually carried out by the appellant and the differential TDS was deducted on a provision, the addition made by the Assessing Officer is found to be in order Keeping in view the fact that the methodology followed by the appellant goes against the principle of the 'matching concept' as clearly laid down in Rule 37BA, and the fact that the Assessing Officer has followed the principle laid. down in the said Rule and has only added back the unreconciled receipts, the entire addition is upheld’’. .
Now before me, ld. Authorised Representative strongly 4. assailing the orders of the lower authorities submitted that matching concept would come into play only where assessee had not shown income corresponding to the tax deducted at source. According to him, assessee had shown such income either in the impugned assessment year or in subsequent assessment year. Contention of the ld. Authorised Representative was that the clients of the assessee had deducted tax even on advance payments and even on contracts, on which assessee was still to do any work. Further, according to him, assessee was not given a proper opportunity to explain the difference.
Per contra, ld. Departmental Representative strongly 5.
supported the orders of the authorities below.
ITA No.2294 /Mds/2017. :- 5 -:
I have considered the rival contentions and perused the orders of the authorities below. Among the four parties, difference in the amounts of which were considered for additions by the ld. Assessing Officer, assessee has accepted the difference in the case of M/s.Bennet property holding company ltd. The said M/s. Bennet property holding company ltd had clearly mentioned that the contract work worth �24,44,659/- was carried out by the assessee and the difference of �7,280/- in TDS was on a provision of �3,64,000/-.
However with regard to other three parties M/s. Airtel M Commerce Services Ltd, M/s.Bharati Telemedia ltd, and M/s. Bharati Airtel ltd, assessee was unable to produce any reconciliation. Now the contention taken by the assessee was that if given one more opportunity it can reconcile the amounts shown in Form 26AS with the income returned by the assessee for these three parties also. As per the assessee corresponding income is reflected in its return either for the impugned assessment year or for the succeeding assessment year.
Since no income can be taxed twice, I am of the opinion that assessee has to be given one more opportunity to reconcile the difference in respect of these three companies. I set aside the orders of the authorities below with regard to income shown by the assessee with respect to work done by it for M/s. Airtel M Commerce Services Ltd, M/s. Bharati Telemedia ltd, and M/s. Bharati Airtel ltd, on which TDS
ITA No.2294 /Mds/2017. :- 6 -: was deducted by them, back to the file of the ld. Assessing Officer for consideration afresh in accordance with law.
In the result, appeal of the assessee is allowed for statistical 7. purpose. Order pronounced on Thursday, the 4th day of January, 2018, at Chennai.