ACIT, CIRCLE - 31, KOLKATA, KOLKATA vs. GOPAL MAHAPATRA, KOLKATA

The only issue to be decided in this appeal is that whether the CIT(A) is justified in deleting the addition made towards difference in turnover figure between the TDS certificate and one disclosed by the assessee.

During the re-assessment proceedings, the assessee has explained in detail and filed reconciliation of difference by way of a written submission dated 21.12.2009, wherein he stated that difference between the turnover in trading account and the turnover as per TDS certificate is only for the reason that contracting party paid the contractual amount by deducting the value of the cement and steel and the net value after such deduction is shown in the trading account. Not satisfied with the Gopal Mahapatra Assessment Year: 2004-05 explanation, the AO added the difference of amount between trading account and amount as per the TDS certificate to the tune of Rs.2,17,43,569/- treating the same as assessee’s undisclosed income.

The assessee contended before the ld. CIT(A) that the difference in turnover arose in the two concerns of the assessee i.e., M/s. Online Builders and M/s. New Online Builders. The amounts received were credited into the P&L account of the above concerns under the heads “contract price” and “labour charges”. The AO only considered the turnover on account of labour charges and completely ignored the amount under the head “contract price”. It is also stated that it is a common practice that the contractors would issue the running bills and against such bills the contractors receive part payment, advances, etc. on which tax is deducted by the contractees.

Before us, the DR submitted that it is a case of short assessment by showing less amount. The assessee did not produce sufficient documents in support of difference between turnover as per P&L account and turnover as per TDS certificate. During the course of first appellate proceedings, the assessee raised a new version by showing that the AO only considered the amount credited to the P&L account under one head i.e. “labour charges” and not considered the turnover under other head “contract price”. The assessee submitted that bills, etc. submitted before the CIT(A) belonging to one of the contracting parties i.e. M/s. Victoria Greens, basing on which the ld. CIT(A) observed during the assessment year under appeal. The turnover as per the TDS certificate was more and turnover as per P&L a/c. was less while the preceding year it was reversed i.e. the turnover as per P&L a/c. was more than the turnover as per TDS certificates. The ld. DR submitted that the ld. CIT(A) has not afforded any opportunity to the Gopal Mahapatra Assessment Year: 2004-05 AO much less by way of a remand report and prayed for restoration of file to the AO for detailed enquiry.

We have heard the rival submissions and perused the materials available on record. We deem it fit and appropriate in the facts and circumstances of the case, in the interest of justice and fair play, to set aside this issue to the file of the Assessing Officer to verify the submission and reconciliation statement of turnover and decide the issue afresh in accordance with law. The assessee is also at liberty to file additional documents and evidence in support of his contention.

In the result, the appeal filed by the Revenue is allowed for statistical purposes.