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Income Tax Appellate Tribunal, “D”, BENCH MUMBAI
Before: SHRI R.C.SHARMA, AM & SHRI C.N.PRASAD, JM
आदेश / O R D E R PER R.C.SHARMA (A.M): This is an appeal filed by the assessee against the order of CIT(A) for the assessment year 2011-2012 in the matter of order passed u/s.143(3) of the IT Act. 2. Following ground has been taken by the assessee. “On the facts and in the circumstances of the case the learned Assistant Commissioner of Income Tax 21(1), Mumbai (hereinafter referred to as Assessing Officer) erred in disallowing Rs.41,78,199/- as difference in total receipts as per Form 26AS and return of income filed.”
Rival contentions have been heard and record perused.
Mr. Darayus Ardeshir Bhathena 4. The facts of the case, observations and findings of the AO in the assessment order in respect of this ground are summarized as under:-
1.
On perusal of income & expenditure statement, the A.O. noted that the assessee had shown commission received at Rs.2,40,00,000/- whereas, as per 26AS statement, the total receipts by the assessee was at Rs.2,81,78,199/-. Accordingly, the A.O. arrived at a primary conclusion that there was excess receipts of Rs. 41,78,199/- which was not disclosed by the assessee in his return of income. Under such facts, the A.O issued show cause notice to the assessee on 29.11.2013. In response, the assessee submitted that they bad billed for commission amount to NAT Steel Equipment Pvt Ltd. for the F.Y. 2010-11 and that he had wrongly added the amount under nomenclature of service lax for the F.Y. 2010-11 It was contended that as per law, commission paid to Director is out of purview of service tax and the service tax registration was also accordingly cancelled by the assessee. It was contended that NAT Steel Equipment Pvt. Ltd. had taken a note of the same to adjust the excess charged and paid amount in subsequent amounts payable to Darayus.
2. It was also submitted before the A.O. that NAT have also confirmed the said facts in their letter head. It was accordingly contended before the A.O. that the amount was wrongly added in the bill is not in the nature which can be covered u/ s.43B and as such, no disallowance was called for. The A.O. considered such submissions of the assessee but did not find the same to be acceptable. She observed that as per 26AS total receipts of the assessee during the year under consideration is Rs.2,81,78,199/- whereas, commission receipts shown by the assessee is only to the tune of at Rs.2,40,00,000 /-. 3.The AO observed that assessee could not satisfactorily explain the receipts during the year to the tune of Rs.41,78,199/- and hence, the same was assessed as his 'income from undisclosed sources' and added to the total income.
5. By the impugned order, CIT(A) confirmed the action of the AO against which assessee is in further appeal before us.
6. We have considered rival contentions and carefully gone through the orders of the authorities below and found from record that the AO had Mr. Darayus Ardeshir Bhathena referred to 26AS statement and raised query about the Commission / TDS shown in 26AS vis-à-vis Gross Commission. As per the assessee, the Gross Commission was to the tune of Rs.2,40,00,000/- and Service Tax on the same wrongly charged was of Rs.24,70,000/- making it to total of Rs.2,64,70,000/-. The assessee also referred to the latest 26AS downloaded and enclosed the same in the paper book. It was also contention of learned AR that service tax on commission paid to the Director was outside the purview of Service tax chargeability as per Service tax circular attached with the submission which was also duly provided to the Assessing Officer during assessment proceedings.
Our attention was also invited to the service tax registration which was surrendered to the authorities on account of non-applicability. In view of the above discussion, we are of the considered view that figures in the return of income vis-à-vis in form No. 26AS require proper reconciliation as far as commission income is concerned. In the interest of justice, we restore the issue back to the file of the AO for deciding afresh in terms of our above observation.
In the result, appeal of the assessee is allowed for statistical purposes.