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Income Tax Appellate Tribunal, ‘B’ BENCH, BANGALORE
O R D E R
Per INTURI RAMA RAO, AM :
This is an appeal filed by the assessee and is directed against the order of the Commissioner of Income-tax (Appeals),[CIT(A)], Kalaburagi, dated 31/07/2015 for the assessment year 2009-10.
The assessee raised the following grounds of appeal:
1) “The order of the CIT (A) in so far as they are against the appellant are opposed to law, equity, and weight of evidence, probabilities, facts and circumstances of the case.
Page 2 of 5 2) The appellant denies to be assessed at Rs. 1,01,88,788/- against the declared total income of Rs.3,99,683/- on the facts and circumstances of the case. 3) The learned CIT(A) was not justified in passing the order in undue haste without providing the appellant a reasonable opportunity of hearing to the appellant to present the case, which is in grave violation of principles of natural justice on the facts and circumstances of the case. 4) The learned CIT (A) is not justified in confirming the disallowance of Rs.97,74,207/- under the head unaccounted contract receipts on the facts and circumstances of the case. 5) The learned CIT(A) is not justified in law and also on facts in not allowing the transportation charges incurred and paid directly to the transporter by the company, instead of just adding revenue while disregarding the genuine expenditure incurred by the appellant, which was against the principles of equity, under the circumstances of the case. 6) The learned CIT(A) failed to appreciate the fact that, what could be brought to tax are such incomes which may arise after setting off of genuine allowable expenditure as per the scheme of the Act, under the facts and circumstances of the case. 7) The learned CIT(A) failed to appreciate the fact that the transportation charges were paid directly to Sri N Thippeswamy which was offered in his return of income and that the HSD, explosives, etc., were supplied by the company which were debited in the company' s books, which caused the difference in the accounts, under the facts and circumstances of the case. 8) The learned CIT(A) failed to appreciate that the so called contract receipt added to the income of the appellant was admittedly an expenditure incurred for transport and had to be rightly allowed by the assessing officer as an expenditure, which would render the said addition to be revenue neutral on the facts and circumstances of the case. 9) The learned CIT (A) failed to appreciate that consent cannot confer jurisdiction and thus the learned Assessing Officer ought not to have relied on the erroneous statement made by the appellant under the facts and circumstances of the case.
Page 3 of 5 10) Without prejudice to the right to seek waiver with the Hon'ble Chief Commissioner of Income Tax/Director General of Income Tax, the Appellant Firm denies itself liable to be charged to interest under section 234B and 234D of the Act which under the facts and circumstances of the case deserves to be cancelled. The calculation of interest under section 234B and 234D is not in accordance with law as the rate, amount and method for calculating interest is not discernible from the order of assessment.
11) The appellant craves leave to add, alter, modify, delete or substitute any or all of the grounds and to file a paper book at the time of hearing the appeal.
12) 1n view of the above and other grounds that may be taken at the time of the hearing the appeal, the appellant prays that the appeal be allowed in the interest of justice and equity. ”
Briefly facts of the case are that the assessee, an individual, filed return of income on 30/9/2009 for the assessment year 2009-10 declaring a total income of Rs.3,99,683/-. After processing the said return of income u/s 143(1) of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short] the case was selected for scrutiny and the assessment was completed u/s 143(3) of the Act vide order dated 12/12/2011 on a total income of Rs.1,01,88,788/-. While doing so, the Assessing Officer (AO) made addition on account of difference in gross receipts from transport business as per Form No.16A and books of account. The difference in Form No.16A and the amount accounted for in the books of account is reconciled by the assessee as follows:
Page 4 of 5 Reconciliation statement of form 16A and books of account: Gross works contract receipts as per Form 16A 2,18,17,944 Less: Ore excavation receipts account in the books 1,20,43,737 Difference ... 97,74,207 a) Payment by cheques directly to N.Thippeswamy & Raj Associates directly but debited to our a/c 71,05,030 b)Explosives supplied deducted from amounts payable to us instead of debiting to our a/c 18,40,569 c)TDS deducted from amounts payable to us instead of debited to our a/c 29,573 d) HSD deducted from amounts payable to us instead of debiting to our a/c 1,47,600 e) HSD reverse entries in the books of account 6,51,435 ------------- (-)97,74,207 0.00 The above re-conciliation statement was not accepted by the AO and brought the difference amount to tax.
Being aggrieved, an appeal was preferred before the CIT(A) who vide impugned order confirmed the action of the AO.
Being aggrieved, assessee is in appeal before us in the present appeal.
We heard rival submissions and perused the material on record. It is settled law that addition cannot be made merely because of difference in the amount as per Form 16A and as per the amount credited in the books of account. But the difference is to reconcile with corroborative evidence. From a perusal of the assessment order, we find that the AO had not made any attempt to cross-verify the contention of the assessee with the payer of the money. That apart, we also find that the whole amount of difference cannot be brought to tax. What can be brought to tax
Page 5 of 5 is only the income portion of the receipt. In view of these principles, we remand the matter back to the file of AO with a direction to frame de novo assessment in light of the principles enunciated above.
In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.