Armin Percy Captain, Mumbai V. Income Tax Officer 20(1)(2), Piramal Chambers

ITA 2461/MUM/2023

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0504 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 15-10-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 12-07-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(2)

Judgement Text

P a g e | 1 ITA No.2461/Mum/2023 Armin Percy Captain Vs. ITO 20(1)(2) IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA No.2461/Mum/2023 (A.Y. 2014-15) Armin Percy Captain, 4/5, RustomBaugSantsavta Marg, Byculla, Mumbai – 400027 Vs. ITO 20(1)(2) Piramal Chambers LalbaugParel, Mumbai – 400012 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No:AADPC2950Q Appellant .. Respondent [ Appellant by : None Respondent by : Ajeya Kumar Ojha Date of Hearing 16.10.2023 Date of Pronouncement 26.10.2023 आदेश / O R D E R Per Amarjit Singh (AM): This appeal filed by the assesse is directed against the order passed by the ld. CIT(A) NFAC, dated 10.02.2023 for A.Y. 2014-15. The assessee has raised the following grounds before us: “1. On the facts and circumstances of the case and R in law the learned Commissioner of Income Tax (F (Appeals) - NFAC erred in confirming the order of n the Assessing officer and thereby adding the f amount of INR 33,19,289/- being the difference t of income as per 26AS and the gross income as declared by the appellant. The appellant prays that the said amount of INR 33,19,289/- is not the income of the appellant and hence, the addition made by the learned Commissioner of Income Tax (Appeals) - NFAC be deleted. 2. Without prejudice to the above, on the facts and circumstances of the case and in law the learned Commissioner of Income Tax (Appeals) - NFAC erred in adding the gross difference between Income as per Form 26AS in comparison with the turnover declared by the appellant as P a g e | 2 ITA No.2461/Mum/2023 Armin Percy Captain Vs. ITO 20(1)(2) against adding only margin of profit of 10 % to the income of the appellant. Your appellant prays that at best, an amount of INR 3,31,928/- be added to the income of appellant being 10 % of the difference amount of INR 33,19,289/- between Form 26AS and turnover of the year as declared by the appellant. 3. Your Appellant craves leave to add, alter, amend, delete or withdraw any or all grounds of appeal and to submit such statements, documents and papers as may be considered necessary either at or before hearing of the appeal.” 2. Fact in brief is that return of income declaring total income of Rs.624,182/- was filed on 15.10.2014. The case was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued. The assessee is an individual and proprietary of M/s Meher Enterprises working as a service provider to M/s Mearsk Limited, India a company which manufactures and sale pharmaceuticals and chemical products. During the course of assessment proceedings the assessing officer noticed that assessee has shown gross receipt as per form 26AS to the amount of Rs.815,98,086/- however, the total receipt in the profit and loss account was shown at Rs.714,49,127/-. In response, the assessee has reconciled the difference to the amount of Rs.46,92,093/- pertaining to statutory liability of ESIC, PF and professional taxes and amount of Rs.20,87,577/- paid by sister concern as service book, however, the assessee was not able to explain the difference of amount of Rs.33,19,289/-. In this regard the assessee submitted that this difference was on account of amount utilised in subsequent year. This explanation of the assessee was not accepted by the assessing officer since, the assessee was following the mercantile method of accounting and the same should have been offered for tax during the year under consideration. In view of the above facts the difference of Rs.33,19,289/- was added to the total income of the assessee. 3. The assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee. P a g e | 3 ITA No.2461/Mum/2023 Armin Percy Captain Vs. ITO 20(1)(2) 4. Heard the ld. D.R and perused the material on record. During the course of assessment the AO has made addition of Rs.33,19,289/- as discussed supra in this order being the amount of difference as per form no. 26AS and the amount shown as receipt in the profit and loss account by the assessee. During the course of appellate proceedings before the ld. CIT(A) the assessee submitted that the said amount of Rs. 33,19,289/- was nothing but the routine advances given to the assessee for the expenses incurred on salaries of staff which was actually a reimbursement expenses as per the agreement dated 15.08.2020. The assessee also submitted in that submission that the same was correctly shown as current liability as per the accounting method consistently followed by the assessee. However, the ld. CIT(A) has neither given any finding on the aforesaid submission of the assessee nor called for any remand report from the assessing officer on the claim of the assessee that the same was the routine advances given to the assesse to meet the expenses incurred on salary of staff for which assessee was working as a service provider. Therefore, we consider it appropriate to restore this issue to the file of the assessing officer for deciding afresh after verification of the relevant supporting document and material referred in the orders of the Ld. CIT(A) as discussed supra in this order. A fair and reasonable opportunity of hearing also be provided to the assessee. Therefore, the appeal of the assessee is allowed for statistical purposes. 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 26.10.2023 Sd/- Sd/- (KULDIP SINGH) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 26.10.2023 PS: Rohit P a g e | 4 ITA No.2461/Mum/2023 Armin Percy Captain Vs. ITO 20(1)(2) आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 4. आयकर आयुक्त(अपील) / Concerned CIT 5. विभागीय प्रविवनवध, आयकर अपीलीय अवधकरण, अहमदाबाद / DR, ITAT, Mumbai 6. गार्ड फाईल / Guard file. आदेशानुसार/BY ORDER, सत्यावपि प्रवि //True Copy// (Asst. Registrar) ITAT, Mumbai