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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Shailesh Joshi Income Tax Officer, 3rd Raviraj CHS Ltd, Survey No. Ward 21(2)(4) 161, JUHU Varsova Link Rd, Mumbai-400 051 Vs. Mumbai-400 053 PAN No. ACZPJ7145C Appellant .. Respondent .. None Assessee by Revenue by .. Shri Naveen Gupta, DR .. Date of hearing 01-05-2017 Date of pronouncement .. 01-05-2017 O R D E R PER MAHAVIR SINGH, JM:
These two appeals by the assessee are arising out of the different orders of CIT(A)-32, Mumbai, in appeal No. CIT(A)-32/ITO 21(2)(4)/IT-84 & 98/2012- 13 dated 05-08-2013 & 06-09-2013. The Assessment was framed by ITO Ward 21(2)(4) Mumbai for the A.Y. 2006-07 vide order dated 23-12-2011 u/s 143(3) read with section 147 of the Income Tax Act, 1961 (hereinafter ‘the Act’). The penalty was levied by ITO Ward (2)(4) u/s 271(1)(c) of the Act vide his order dated 06-09-2013.
The only issue in this appeal of assessee in for AY 2006-07 is against the order of CIT(A) confirming the addition made by AO on account of different in gross receipts declared by assessee as per audited books of account and gross receipts as per TDS certificates.
We have heard the learned DR and gone through the facts and circumstances of the case. Brief facts are that the assessee is engaged in labour job work of readymade garments. The assessee has declared a gross receipt at Rs.57,86,655/- but as per TDS certificate the gross receipts are at Rs. 63,07,031/- & 6604/Mum/2013 Shailesh Joshi; AY:06-07 thereby, there is a difference in gross receipts amounting to Rs. 5,20,376/-. Accordingly, the AO added the less gross receipt declared in the books of account at Rs. 5,20,376/- by the assessee. Aggrieved, assessee preferred the appeal before CIT(A), who also confirmed the action of the AO despite the fact that he assessee explained that an amount of Rs. 3,16,954/- represents the credit notes in respect of rate difference, which was not considered. Aggrieved, assessee is in second appeal before Tribunal.
We have gone through the case records and facts of the case. We find that admittedly there is a difference in gross receipts as declared by assessee in its books of account at Rs. 57,86,655/- and receipts as per TDS certificates at Rs. 63,07,031/-. The assessee before CIT(A) and now before us, in its grounds of appeal, claimed that the TDS is deducted on the gross amount basis on the amount of gross bills without giving effect to debit notes / credit notes and note on actual amount received by assessee. This issue was taken by assessee before CIT(A) but was not considered by him. Even, the AO has not called for the account statement of the relevant parties and cross verified with the assessee’s statement and without that made addition. We find that the assessee has claimed that it is maintaining accounts on mercantile basis while the TDS was deducted by the other party on the gross bill. Subsequently, there are debit notes and credit notes and those should have been considered by the lower authorities. In term of the above, we restore the matter back to the file of the AO to verify from the parties and given effect to the debit notes / credit notes and still there is a difference in reconciliation, the AO is free to decide the issue. In term of the above, we set aside the order of the lower authorities and restore the matter back to the file of the AO for re-consideration on these issues. Appeal of assessee is allowed for statistical purposes.
5. Coming to AO under section 271(1)(c) of the Act and confirmed by CIT(A). On the very issue which we have already set aside to the file of the AO, this penalty will not survive. Accordingly, we delete the penalty. However, during the course of set aside proceedings, if the AO comes to the conclusion that there & 6604/Mum/2013 Shailesh Joshi; AY:06-07 is a concealment on the part of the assessee, he is free to initiate penalty proceedings as per law under section 271(1)(c) of the Act. This appeal of assessee is allowed.
In the result, appeals of assessee in is set aside and allowed for statistical purpose and in is allowed. Order pronounced in the open court on 01-05-2017.