M/s P.D. Gupta and sons, HUF, Ludhiana V. ITO, Ward-VI(2), Ludhiana

ITA 182/CHANDI/2023

• Counselvise Citation: [2023] 101 COUNSELVISE.COM (IT) 9942 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-09-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 28-03-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHARMAN VIR
• Assessee Lawyers: WAY OF TRANSPORT INCOME
• Keywords: Business income; Source of fund; TDS; FORM 26AS
• Section: 44AD

Judgement Text

आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘B’, CHANDIGARH BEFORE SHRI A.D. JAIN, VICE PRESIDENT & SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 182/CHD/2023 Ǔनधा[रण वष[ / Assessment Year : 2017-18 M/s P.D. Gupta and Sons HUF, 109, Model Gram, Ludhiana 141002 Vs. बनाम The ITO, Ward VI(2), Ludhiana èथायी लेखा सं./PAN No. AAGHP2693Q अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent ( Virtual Hearing ) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Shri Ashish Aggarwal, CA राजèव कȧ ओर से/ Revenue by : Shri Dharman Vir, JCIT Sr.DR स ु नवाई कȧ तारȣख/Date of Hearing : 18.09.2023 उदघोषणा कȧ तारȣख/Date of Pronouncement : 21.11.2023 आदेश/Order Per A.D. Jain, Vice President: This is Assessee’s appeal against the order of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 02.02.2023 for the Assessment Year 2017-18, taking the following grounds of appeal: 182-Chd-2023– M/s P.D.Gupta and Sons HUF, Ludhiana 2 1. That the ld. CIT(A) NFAC has erred in confirming the addition of Rs. 19,40,225/- as income for application from other sources. 2. That the Ld. CIT(A) NFAC, has failed to appreciate the submissions of the appellant that the said income did not belong to the appellant but was income of the partnership firm M/s Shiva Logistics who have already disclosed the same in their return of income, thereby subjecting an income to tax twice which is against the law. 3. That the Ld. CIT(A) has erred in not deleting the addition of Rs. 19,40,225/- (being total receipts from transport) and not considering the submissions of the appellant to alternatively treat these receipts under the head business income and charging tax on these receipts @ 8% u/s 44AD of the Act. 3. The facts are that the Assessee HUF was carrying on the business of transport as proprietor of M/s Shiva Logistics upto 31.3.2016. The said preceptorship business was converted into a proprietorship concern w.e.f. 1.4.2016. The Assessee HUF filed its return of income of only interest on FDR amounting to Rs. 2,18,772/- and claimed TDS thereon amounting to Rs. 21,878/-. The CPC, Bangaluru made assessment on the Assessee HUF at an income of Rs. 2,17,00,410/- as against that of income filed. Against this intimation 182-Chd-2023– M/s P.D.Gupta and Sons HUF, Ludhiana 3 order dated 2.2.2023, the Assessee filed appeal against CIT(A), NFAC, who reduced the addition from Rs. 2,87,98,638/- to Rs. 19,40,225/-, as Form 26AS was reflecting only this amount as paid to the Assessee by way of transport income. 4. Before us, reiterating the grounds of appeal raised, the ld. Counsel for the Assessee has contended that as on date, the form 26AS of the Assessee for the A.Y. 2017-18 is showing income from transport of Rs. 1,58,400/- only. The ld. Counsel has submitted that accordingly, the addition made may kindly be restricted to this amount of Rs. 1,58,400/-. It has further been contended that the income from transport has only been added to the income of the Assessee, whereas this income did not belong to the Assessee; that the transport income was that of the erstwhile partnership firm, M/s Shiva Logistics; that M/s Shiva Logistics had already disclosed this income in its return of income; that therefore, the addition in the hands of the Assessee has amounted to the same income having been assessed twice, which cannot be done under the law; that alternatively, the addition of the entire receipt of transport income is totally unjustified; that it is common knowledge that income form transport is around 5% to 10% of the gross receipts; and that if at all any addition is to be sustained, the same should be restricted to 10% 182-Chd-2023– M/s P.D.Gupta and Sons HUF, Ludhiana 4 of the gross receipts, i.e., Rs. 15,840/-, which is 10% of the total receipts of Rs. 1,58,400/-, as reflected in the new Form 26AS. 5. The ld. DR, on the other hand, has placed strong reliance on the impugned order. 6. We have heard the rival contentions and have perused the material on record. 7. The additon of Rs. 2,87,98,638/- was made by the Assessing Officer to the total income of the Assessee on account of difference in the receipts declared by the Assessee HUF and as reflected in the existing form 26AS. By virtue of the impugned order, the ld. CIT(A) reduced this additon to Rs. 19,40,225/-, as it was held that the Form 26AS was reflecting only this amount as paid to the Assessee, as transport income. The Assessee has maintained that as on date, the Form 26AS of the Assessee for assessment year 2017-18 is showing income form transport of Rs. 1,58,400/- only. A copy of the said Form 26AS has been filed before us. The ld. CIT(A), following the decision of the Hon'ble Delhi High Court in the case of ‘Court on its Own Motion Vs. CIT’, [2013] 31 taxmann.com 31(Delhi), that of the ITAT Kolkata Bench in ‘Mercury Car Rentals (P.) Ltd. vs. Dy. CIT’, [2019] 71 ITR [Tri.) (SN) 78, the decision of the Ahemdabad Bench of the ITAT in the 182-Chd-2023– M/s P.D.Gupta and Sons HUF, Ludhiana 5 case of ‘ITO vs. Hans Road Carriers Pvt. Ltd.’, 59 DTR 35, the decision of the Jabalpur Bench of the ITAT in the case of ‘Ravindra Pratap Thareja vs. ITO’, [2015] 60 taxmann.com 304 (Jabalpur - Trib) and that of the Allahabad Bench of the CESTAT in ‘Kush Constructions vs. CGST’, [2020] 118 taxmann.com 164, held that no additon can be made merely on the basis of entries reflecting in the Form 26AS; that Form 26AS is a statement that provides details of any amount deducted as TDS or TCS from various sources of income of a taxpayer; that because Form 26AS is a ready reckoner of the Assessing Officer, it is forgotten that mistakes often creep into this document solely because of errors committed by other people and not the Assessee; that tax deduction may go wrong, if the detector fails to deduct or gives wrong PAN of the deductee, but it is seen that in a number of instances, due to wrong deduction of TDS or for whatever reason, the Assessee suffers; that thus, it cannot be said that the entries reflected in the Form 26AS are fool proof every time; that it is therefore, that the Courts have held that the Revenue cannot raise any demand on the basis of the difference between the auto-populated amounts on the income tax portal and the GST portal without further examining the reasons for thesaid difference and without establishing that the entire amount received by the Assessee, as reflected in the said reasons in 182-Chd-2023– M/s P.D.Gupta and Sons HUF, Ludhiana 6 the Form 26AS, being consideration for services provided and without examining whether the difference was because of any exemption or abatement, since it is not legal to presume that the entire differential amount was on account of consideration for proving services. The ld. CIT(A) held that where the Assessee disputes the entries reflected in the Form 26AS, it is the duty of the Assessing Officer to make further verification and only thereafter, if he finds any discrepancy in the Assessee’s claim, then only he can he make any addition. The ld. CIT(A) held that in the Assessee’s case, since in the existing Form 26AS of the Assessee, after filing of correction statement by some of the deductors, receipts were being reflected at Rs. 19,40,225/-, the Assessee should approach the rest of the deductors to file correction statements for updating TDS statements by changing the deductee PAN; and that meanwhile, the additon made, amounting to Rs. 2,68,58,413/- was being directed to be deleted and the rest of the additon, amounting to Rs. 19,40,225/- was to be deleted as and when the dedicators file the correction statement. 8. As per the latest form 26AS of the Assessee for the assessment year 2017-18, a copy whereof has been filed before us on behalf of the Assessee, the income of the Assessee from transport is being shown at Rs. 1,58,400/-. It is the request of the Assessee that 182-Chd-2023– M/s P.D.Gupta and Sons HUF, Ludhiana 7 the additon be restricted to this amount only in view of the order passed by the ld. CIT(A), as discussed herein above. The matter is remitted to the file of the Assessing Officer to be decided afresh in accordance with law, after taking into consideration the said latest Form 26AS of the Act, on affording due and adequate opportunity of the hearing to the Assessee. It is maintained on behalf of the Assessee and not disputed by the Department that in fact, the mistake had occurred on the part of the customers, who had wrongly deducted the TDS in the name of the Assessee HUF, whereas it should have been deducted from the payment to M/s Shiva Logistics, which was a partnership concern carrying on the transport business, since the old customers continued to deduct TDS on the old PAN, which belonged to the Assessee HUF, as against the partnership firm of M/s Shiva Logistics. 9. While deciding the matter, all pleas available under the law shall be available to the Assessee before the Assessing Officer. The A.O. shall also consider all other pleas raised before us, i.e., that the transport income has already been disclosed by the partnership firm, M/s Shiva Logistics and that the said income cannot be assessed twice, and that additon, if at all any is to be made, it is to be restricted to 10% of the gross receipts of Rs. 1,58,400/-, as now reflected in the 182-Chd-2023– M/s P.D.Gupta and Sons HUF, Ludhiana 8 Form 26AS of the Assessee, instead of additon of 100% of the receipts on account of transport income. Ordered accordingly. 10. In the result, for statistical purposes, the appeal is treated as allowed. Order pronounced on 21 11.2023. Sd/- Sd/- (VIKRAM SINGH YADAV) ( A.D. JAIN ) Accountant Member Vice President “आर.के.” आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आय ु Èत/ CIT 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[ फाईल/ Guard File आदेशान ु सार/ By order, सहायक पंजीकार/ Assistant Registrar