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Income Tax Appellate Tribunal, MUMBAI BENCHES “D” MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI N.K. PRADHAN
ORDER
PER N.K. PRADHAN, AM
This is an appeal filed by the assessee. The relevant assessment year is 2009-10. The appeal is directed against the order u/s 263 of the Income Tax Act, 1961 (the “Act”) passed by the Commissioner of Income Tax (CIT) – 24, Mumbai.
The sole ground raised by the assessee in this appeal is that the CIT has erred in law as well as on facts by passing order u/s 263 of the Act setting aside the assessment order u/s 143(3) dated 22/12/2011; and directing the Assessing Officer (AO) to redo the assessment.
In a nutshell, the facts are that the CIT, on verification of the assessment record and the assessment order, found the following discrepancies:
‘’It is seen that the sales have been shown at Rs. 10,50,87,317/- in the profit and loss account. However, from the TDS Certificates, it is seen that the assessee received contract receipts amounting to Rs. 1,58,01,724/- from the following three parties in addition to what is credited to the profit and loss account.
SL Name of the party Amount paid by parties TDS No. to assessee as per Form Amount No. 16A but not included (Rs.) in P&L A/c (Rs.) 1 Nepture Ventures & 89,43,683/- 2,02,662/- Developers P Ltd. 2 Nepture Construction 67,54,536/- 1,53,038/- 3 Neptune Developers 1,04,505/- 2,152/- & Construction Total 1,58,01,724/- 3,75,852/-
It is also observed that the TDS credit availed by the assessee amounting to Rs. 27,13,168/- includes the TDS amount which remained to be offered for taxation, as the same were not credited to the profit and loss account.
This has resulted in escapement of income to the extent of Rs. 1,58,01,724/-‘’ 3.1 In response to the show cause notice issued by the CIT on the above issues, the AR of the assessee filed a written submission which has been extracted by the CIT at page 2 – 5 of his order dated 21.03.2014. Having gone through the said submission, the CIT observed that the income mentioned in the TDS certificates are more than the income admitted in the profit & loss account. The AO should have obtained all the details from the assessee or made enquiries with the deductors and examined whether the income taxable in this year are admitted in the profit & loss account. The AO failed to do so. Therefore, the CIT passed an order u/s 263 setting aside the order passed by the AO. He directed the AO to redo the assessment to reconcile these two figures and assess the correct income for the impugned assessment year.
3.2 None appeared on behalf of the assessee. The learned DR supports the order passed by the CIT, thus stating that there is substantial difference of Rs. 1,58,01,714/- in the amount paid by the parties to the assessee as per Form No. 16A but not included in profit & loss account. He also points out that the assessee has claimed credit of TDS of Rs. 3,75,852/- on the above differential amount of Rs. 1,58,01,724/-.
We have perused the relevant material on record. We have also heard the learned DR on the above issue. The fact remains that the AO has not verified in the instant case the amount paid by the parties to the assessee reflected in Form No. 16A but not included in the profit & loss account. The same comes to Rs. 1,58,01,724/-. On the other hand, the assessee has claimed credit of TDS of Rs. 3,75,852/- on the above amount. In the case of Malabar Industrial Co. Ltd. vs. CIT (2000) 109 4.1 Taxman 66 (SC), it has been held by the Hon'ble Supreme Court that were the Assessing Officer had accepted entry in statement of account filed by the assessee, in absence of any supporting material without making any enquiry, exercise of jurisdiction by the Commissioner u/s 263(1) was justified. The ratio laid down in the above case squarely applies to the present one. In view of the above we hold that the CIT has rightly passed order u/s 263 in the present case.
In the result, the appeal is dismissed.
Order pronounced in the open court on 14/03/2017