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Income Tax Appellate Tribunal, DELHI BENCH “D”, NEW DELHI
Before: SH. P. K. BANSAL & SMT. BEENA A. PILLAI
O R D E R PER BEENA A. PILLAI, J.M :
The present appeal has been preferred by revenue against order dated 13.12.2013 passed by Ld. CIT (A)-VIII, New Delhi, for assessment year 2010-11 on following grounds of appeal:
1. Whether on the facts and in the circumstances of the case & law, the Ld. CIT(A) erred in directing the AO to allow credit for entire TDS in violation to the provisions of Section 198 and 199 of the I. T. Act, 1961?
2. That the order of the Ld. CIT(A) is erroneous and is not tenable on facts and in law.
3. That the appellant craves leave to add, alter, amend or forgo any ground(s) of the appeal either before or at the time of hearing of the appeal.
2. The brief facts of the case are as under: Ld. AO had made an addition of Rs.5,27,72,176/- as advances received for construction on the basis of non- reconciliation of TDS certificate with that in tax audit receipt shown in the P & L accounts.
3. Aggrieved by addition made, assessee preferred an appeal before Ld. CIT(A) who deleted the addition by observing as under: The appellant company is the sole contractor for Lotte Engineering Foods India, Chennai factory for three years. The assessee has completed 88.10% of the project costing Rs. 1,64,62,85,0007- as on 31st March, 2010. The balance work completed in earlier year ended 31.03.2009 of Rs.45,43,62,388/-. The ARs reconciliation of revenue for the financial year 2009-10 of Rs.99,60,14,6977- is reproduced below:
"CALCULATION OF THE REVENUE FOR THE FINANCIAL YEAR 2009-10” Contract Value as per agreement 1,64,62,85,000 %age of work completed as per certificate 88.10% Total Revenue as on 31.03.2010 1,45,03,77,085 Revenue booked up to 31.03.2009 45,43,62,388 99,60,14,697 Reconciliation of Income with Form 26AS Sales & Contracts Receipts Date Gross receipts Service tax Income TDS deducted 5/20/09 4,222,595 102,490,182 2,418,112 106,712,777 6/20/09 81,395,414 3,220,794 78,174,620 1,844,420 7/20/09 63,880,022 2,527,715 61,352,307 1,447,521 8/20/09 33,898,876, 1,341,369 32,557,507 768,149 10/20/09 11,372,731 276,037,166 5,748,198 287;409,897 11/20/09 73,204,390 2,896,678 70,307,712 1,464,087 12/20/09 111,844,078 4,425,640 107,418,438 2,236,882 1/20/10 89,992,440 3,560,976 86,431,464 1,799,849 2/20/10 103,497,372 4,095,363 99,402,009 2,069,947 3/31/10 93,184,379 3,687,280 89,497,099 1,863,688 1,045,019,645 41,351,141 1,003,668,504 21,660,853
Less: Provision for WIP as per AS-7 7,653,807 Income as per P&L account 996,014,697 Advance received Date Gross receipts Service tax Income TDS deducted 46,977,246 1,858,877 45,118,369 11/20/09 939,545 Total 1,109,996,891 22,600,398
(1) Advance as per Form 26AS = 46,977,246 WIP as per AS-7 in P&L account = 7,653,807 5,46,31,053 Advance 4,51,18,369 WIP +76.53.807 5,27,72,176 Added by AO as per para 4 of his order" Therefore the AO's apprehensions that there is short fall of revenue in the P & L Account is wrong. The AO should verify the reconciliation of accounts and ask the assessee to produce the reconciliation in accordance of scrutiny assessment. If he cannot understand the reconciliation process, he should take guidance from his supervisor officer Addl. CIT, Range -5, Delhi in due course. After verifying the reconciliation statement and the submission of the AR, I find that the arguments of the AR are found to be correct and justified. The addition made by AO of Rs.5,27,72,176/- on account of short fall in revenue is hereby deleted.