ITO 17(1)(3), MUMBAI vs. BENNY GABRIEL PINTO, MUMBAI

2. The appellant prays that the order of the CIT(A) on the above grounds be reversed and that of the Assessing Officer be restored.”

Rival contentions have been heard and record perused. Facts in brief are that the assessee is an authorized advertising agent for leading publications running a proprietary concern in name & style of M/s Pinto Advertising. During the previous year, the assessee has shown Gross Receipts at Rs.1,08,50,603/- and declared a Net Profit of Rs.6,46,291/-. During the course of the assessment proceedings, the assessee was asked to furnish a statement of income comprised in TDS credit claimed and break-up of the income actually credited in the P & L A/c of this year with an explanation for difference. In response to the same the assessee, vide letter dated 19/10/2011, merely stated that there was no such difference. However, no statement giving details of income comprised in TDS credit and break-up of income shown in the P&L A/c was submitted. Hence, the assessee was granted another opportunity to furnish such details in a tabulated form. On comparison of the details submitted by the assessee and the income actually comprised in the TDS Certificates, following differences were noticed Name of the Amount as per As per details of Difference party TDS Certificates Gross Receipts Airlines 14,59,844/- - 14,59,844/- Marketing Services Karmatex 12,23,147/- - 12,23,147/- Seva Sadan 36,924/- 30,720/- 6,204/- The AO observed that in case of M/s Airlines Marketing Services India Pvt. Ltd. and M/s Karmatex, the assessee has claimed that incomes were offered in P&L Ale. However, perusal of the details of gross receipts submitted by the assessee vide letter dated 19/10/2011 as well as those 3 submitted vide letter dated 09/11/2011, the receipts from the above parties do not form a part of the gross receipts. Further, the assessee has not offered any explanation for such discrepancies/differences. In the circumstances, the said amount of Rs.26,89,195/- was treated by AO as unaccounted income for the year under consideration and added to the total income.

By the impugned order the CIT(A) deleted the addition after having the following observations :- “3.3 I have gone through the findings in the assessment order, document submitted during assessment proceedings and the explanation submitted during the appellate proceedings. On going through the assessment order, it is seen that there is only one reason given by the Assessing Officer for making this addition that the names of both these parties did not figure in the list of parties with gross receipts above Rs.1,00,000/- submitted by the appellant. On the contrary, there are ample evidences submitted by the appellant during assessment proceedings that reflect the correctness of the claim of the appellant. These are :- (i) The details of TDS certificates were submitted by the appellant himself with the Assessing Officer wherein these receipts are reflected. (ii) The appellant has submitted details of sundry debtors above Rs.1,00,000/- and there were only two parties i.e, M/s.Airlines Marketing Services and M/s.Karmatex Apparels Pvt. Itd. These details were already with the Assessing Officer. (iii) Even in the return of income, names of both these parties are appearing under the head "sundry debtors". Airlines Marketing (India) has been shown with a debit balance of Rs.3,53,803/- and Karmatex Apparels Pvt. Ltd. with a balance of Rs.3,40,432/-. (iv) The copy of appellant's bank account in Citizen Co.op Bank Ltd. and in HDFC Bank were submitted before the Assessing Officer. The payments made by these parties have been deposited in these bank accounts and the amounts are tallying with the entries appearing in the accounts of these parties in the books of appellant. 3.4 As regards the difference in the case of Seva Sadan Society, it is seen that the appellant has satisfactory reconciled the difference appearing in the account of Seva Sadan Society. It is apparent that 4 the bill dated 7.3.2008 was accounted by the appellant in the earlier previous year whereas Seva Sadan Society has taken this bill in the current year. From the above, it can be seen that appellant had regular transactions with both the parties and all transactions are properly recorded in the books of account of the appellant. Both the parties have been shown as debtors in the return of income itself. Only because of a typing mistake of clubbing these parties under a separate head cannot be a reason for such an addition of a person who prepared details on behalf of the appellant as these two names were not mentioned in t list of parties with gross receipts of more than Rs.1,00,000/-. The Assessing Officer has not properly verified the details filed by the appellant before him as well as the return of income and has summarily rejected the explanation of the appellant and such an addition cannot be sustained. Assessing Officer has not even given the appellant any specific opportunity to clarify the discrepancy. In view of above discussion, the addition of Rs.26,89,195/- made by the Assessing Officer stands deleted. This ground of appeal is allowed.”