KAWALJEET SINGH ARNEJA ,NAGPUR vs. INCOME TAX OFFICER, WARD-2(1), NAGPUR

this appeal.

The AO has observed that the income of the appellant was computed by taking the gross receipts in the bank account and from the said receipts, the expenditure was deducted and net profit was computed at Rs.5,55,150. In Para 3 of the assessment order, AO has reproduced the statement of the authorised representative on 22.08.2017 which is extracted below :

“There is a difference of receipt of Rs.19,24,712 as per 26AS and as shown by him in his ITR. The probable income on such receipt as per the existing profit shown by the assessee in his profit and loss account could be Rs.1,90,000 which inadvertently remain to be included by the assessee in his total income. The assessee therefore surrenders the amount of Rs.1,90,000 for taxation with a request that the gross difference of receipt of Rs.19,24,712 should not be taxed”.

4 ITA.No.248/NAG./2022 AO did not accept the contention of the appellant on the ground that the appellant has maintained details of expenses and receipts and the Profit and Loss account was prepared based on the above details and the entire expenses were debited in the profit and loss account and after closing the books, return was filed by the appellant.

Hence the AO held that entire amount of Rs.19,24,712 has to be added to the total income.

Secondly, appellant also stated that he was only a commission agent and the receipts figuring in the bank account are advances from customers and it was not his income. AO contended that the advances credited in the bank account were utilised for various payments and the parties have also uploaded the credits in the name of the appellant and they are reflected in Form 26AS.

6.1. Adjudication : The submissions and contentions of the AO have been considered along-with the statement of facts. Appellant in the statement of facts submitted that this difference was due to the fact because he has taken only the receipts in respect of which transaction were completed while preparing the return of income. The advance amount was not considered for the purpose of taking gross receipt. Since the assessee was not in a position to reconcile these figures the assessee has offered

5 ITA.No.248/NAG./2022 Rs.1,90,000/- as income from the said receipt. As could be seen from the earlier paragraph, appellant requested to consider the income of Rs.1,90,000 from the excess receipts reflected in 26AS. At the appellate stage, he states that the said amount is advance which was not considered for income during the impugned assessment year. The appellant did not produce any details to substantiate his claim that the said receipts were only advances and the advances were offered as income in the subsequent year. The AO has analysed the books and construed that the entire expenditure was debited in the profit and loss account and against the income of Rs.19,24,712, appellant was not in a position to correlate the expenditure incurred during the year. In the absence of any evidence to the contrary, I am constrained to uphold the addition made by the Assessing Officer. This ground is “Dismissed”.

6 ITA.No.248/NAG./2022 the assessee’s instant sole substantive ground back to the Assessing Officer for his afresh appropriate adjudication preferably within three effective opportunities of hearing subject to the rider that it is the assessee’s sole risk and responsibility to prove the case in consequential proceedings.

Ordered accordingly.

Order pronounced in the open Court on 09.05.2024.