Nithya Murthy General Contractors, CHENNAI V. ITO Non Corporate Ward 15(3), CHENNAI

ITA 2554/CHNY/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6753 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 03-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M SUBASHINIJCIT
• Assessee Lawyers: N ARJUN RAJ
• Keywords: TDS
• Section: 194C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI , $% & , ) SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER ./ ITA NO. 2554/CHNY/2018 / ASSESSMENT YEAR : 2014-15 M/S.NITHYA MURTHY GENERAL CONTRACTORS,17/B,PILLAYAR KOIL ST., THIRUVANMIYARM,CHENNAI. 600 041. PAN : AADFN 6831 B V. THE INCOME TAX OFFICER, NON CORPORATE WARD 15(3), CHENNAI. (./ APPELLANT) (/0./ RESPONDENT) . 1 / APPELLANT BY: MR.N.ARJUNRAJ, C.A /0. 1 / RESPONDENT BY : MS M.SUBASHINI,JCIT D.R 1 / DATE OF HEARING : 03.07.2019 1 / DATE OF PRONOUNCEMENT : 03.07.2019 / O R D E R PER VIKRAM SINGH YADAV, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-15, CHENNAI, DATED 26.06.2018. 2. DURING THE COURSE OF HEARING, LD.AR SUBMITTED T HAT THE LD.CIT(A) HAS ERRED IN SUSTAINING THE ADDITION OF RS.87,01,87 3/- BASED ON GROSS RECEIPTS SHOWN IN FORM NO.26AS AT RS.1,85,98,428/- AS AGAINST THE GROSS RECEIPTS ADMITTED IN THE ROI AT RS.98,96,555/ - FOR WANT OF 2 I.T.A. NO.2554/CHNY/2018 RECONCILIATION AND WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATIONS. IT WAS FURTHER SUBMITTED THAT LD.CIT(A) HAS ERRED IN T AXING THE GROSS RECEIPTS AS AGAINST THE PROFIT ELEMENT EMBEDDED THEREIN DESP ITE THE SPECIFIC CONTENTIONS RAISED BEFORE HIM. IN THIS REGARD OUR REFERENCE WAS DRAWN TO PARA 4.3.1 OF THE LD.CIT(A)S ORDER WHICH READS AS UNDER:- 4.3.1 DURING THE ASSESSMENT PROCEEDINGS, THE ASSES SING OFFICER NOTICED THAT THERE WAS A HUGE DIFFERENCE IN GROSS R ECEIPT TO THE EXTENT OF RS.87.01 LAKHS BETWEEN THE PAYMENT REFLECTED IN TDS STATEMENT IN FORM NO.26AS AND THE GROSS RECEIPT REPORTED IN THE P&L ACCOUNT. AFTER GIVING REASONABLE OPPORTUNITY TO THE APPELLANT TO F ILE THE RECONCILIATION, THE ASSESSING OFFICER RESORTED TO ASSESS THE DIFFER ENCE BY APPLYING THE PERCENTAGE OF NET PROFIT DECLARED BY THE APPELLANT IN THE P&L ACCOUNT, AS THE APPELLANT COULD NOT FILE RECONCILIATION. IN SPITE OF SPECIFIC OPPORTUNITY GIVEN TO THE LD.AR DURING HIS APPEARANC E ON 04.06.2018(RECORDED IN THE ORDER SHEET), THE RECONC ILIATION WAS NOT FILED. THEREFORE, I AM CONVINCED THAT APPELLANT HAS NO VALID EXPLANATION FOR THE GROSS RECEIPT AS MENTIONED ABOVE. THEREFORE , THE ASSESSING OFFICERS AFORESAID ADDITION IS CONFIRMED AND THE A PPELLANTS GROUND IS DISMISSED. 2.1 FURTHER OUR REFERENCE WAS DRAWN TO PARA 3.3 OF THE ASSESSMENT ORDER WHICH READS AS UNDER:- 3.3 DIFFERENCE IN RECEIPTS WHEN COMPARED WITH FOR M 26AS . DURING THE COURSE OF SCRUTINY PROCEEDINGS, IT IS N OTICED THAT THE ASSESSEE WAS SHOWN HIS RECEIPTS AS RS.98,96,555/- IN THE RET URN OF INCOME. IT IS ALSO NOTED FROM FORM 26AS THE GROSS RECEIPTS, IS SHOWN A T RS.1,85,98,428/-. THE ASSESSEE WAS REQUESTED TO FURNISH RECONCILIATIO N OF RECEIPTS BETWEEN 3 I.T.A. NO.2554/CHNY/2018 FORM 26AS AND P&L A/C. THE ASSESSEE DID NOT SUBMIT THE RECONCILIATION STATEMENT WITH RESPECT TO 194C AND 194J WITH FORM 2 6AS AS REQUESTED. EVEN AFTER REPEATED FOLLOW-UP ALSO THE ASSESSEE HAS NOT PROVIDED ANY DETAILS NOR SUBSTANTIATED THEIR RECEIPTS. IN THE AB SENCE OF ANY DETAILS PROVIDED BY THE ASSESSEE, THE ABOVE DIFFERENCE AMOU NT OF RS.87,01,873/- IS ADDED AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THI S YEAR AND BROUGHT TO TAX. 3. WE FIND THAT THE ASSESSING OFFICER HAS BROUGHT TO TAX THE DIFFERENTIAL SUM IN GROSS RECEIPTS AS REPORTED IN FORM NO.26AS A ND GROSS RECEIPTS AS REPORTED IN THE ASSESSEES P&L ACCOUNT, THE ASSESSE E HAS NOT BEEN ABLE TO FURNISH THE RECONCILIATION STATEMENT BEFORE THE LOW ER AUTHORITIES AND EVEN DURING THE COURSE OF HEARING BEFORE US, HE HAS SHOW N HIS INABILITY TO FURNISH THE SAME. HOWEVER, WE FIND THAT THE ASSESSING OFFI CER HAS BROUGHT TO TAX THE WHOLE OF THE DIFFERENTIAL GROSS RECEIPTS TO TAX, WH EREAS THE LD.CIT(A) HAS STATED THAT THE ASSESSING OFFICER HAS RESORTED TO ASSESS T HE DIFFERENCE BY APPLYING THE PERCENTAGE OF NET PROFIT DECLARED BY THE ASSESS EE IN THE P&L ACCOUNT. WE THEREFORE, FIND INCONSISTENCY IN THE FINDINGS OF TH E LD.CIT(A) TO THIS EFFECT. HOWEVER, WE AGREE WITH THE CONTENTION RAISED BY THE LD.AR THAT EVEN WHERE THE DIFFERENTIAL HAS TO BE BROUGHT TO TAX, ONLY THE PROFIT ELEMENT EMBEDDED THEREIN, COULD BE BROUGHT TO TAX AND NOT WHOLE OF T HE DIFFERENTIAL GROSS RECEIPTS. IN THE LIGHT OF THE SAME, WE DIRECT THE A SSESSING OFFICER TO APPLY THE NET PROFIT DECLARED BY THE ASSESSEE ON THE DIFFEREN TIAL GROSS RECEIPTS, WHICH CAN BE BROUGHT TO TAX. THE BALANCE ADDITION IS HERE BY DIRECTED TO BE DELETED. 4 I.T.A. NO.2554/CHNY/2018 3.1 IN THE RESULT, THIS GROUND RAISED IN THE APPEA L IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 4. THE OTHER CONTENTION RAISED BY THE LD.AR IS RE GARDING ADDITION OF RS.4,24,126/- BEING THE LOADING & UNLOADING CHARGES , WHICH HAVE BEEN DISALLOWED BY INVOKING THE PROVISIONS OF SECTION 40 (A)(IA) OF THE ACT. IN THIS REGARD, WE REFER TO THE FINDINGS OF THE LD.CIT(A), WHICH IS CONTAINED AT APRA 5.3.1 WHICH READS AS UNDER:- 5.3.1 THE ASSESSING OFFICER HAS DISALLOWED U/S.4 0(A)(IA) AN AMOUNT OF RS.4.24 LAKHS ON THE PAYMENT OF LOADING AND UNLOADI NG, AS THE APPELLANT HAD FAILED TO EFFECT TDS ON THE SAID PAYMENT. BEFORE T HE LD.CIT(A), THE APPELLANTS A.R SUBMITTED THAT THE RECIPIENTS HAD ADMITTED THE AFORESAID PAYMENTS IN THEIR RETURN OF INCOME. DURING THE APPEARANCE ON 4.6.2018 , THE APPELLANTS A.R WAS GIVEN SPECIFIC OPPORTUNITY TO FURNISH SUPPORTING DO CUMENT IN THE PRESCRIBED FORM 26A FROM THE RECIPIENT DECLARING THAT THE ABOV E PAYMENTS WERE REFLECTED IN THEIR RESPECTIVE RETURN OF INCOME. HOWEVER, THE APPELLANT HAS NOT SUBMITTED THE SAME. THEREFORE, I AM CONVINCED THAT THE APPELL ANT HAS NO VALID OBJECTION TO THE ASSESSING OFFICERS DISALLOWANCE AND THEREFO RE, THE AFORESAID DISALLOWANCE IS UPHELD AND THE APPELLANTS GROUND I S DISMISSED. WE DO NOT SEE ANY INFIRMITY IN THE ABOVE CITED FIND INGS OF THE LD.CIT(A) AND THE GROUND SO RAISED BY THE ASSESSEE IS HEREBY DISMISSE D. 5 I.T.A. NO.2554/CHNY/2018 5. REGARDING OTHER GROUNDS OF THE APPEAL TAKEN BY THE ASSESSEE, NO SPECIFIC ARGUMENTS HAVE BEEN TAKEN BY THE LD.AR. H ENCE, THE REMAINING GROUNDS STAND DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 03/07/2019 AT CHENNAI. SD/- SD/- ( ) ( $% & ) (GEORGE MATHAN) (VIKRAM SINGH YADAV) /JUDICIAL MEMBER / ACCOUNTANT MEMBER /CHENNAI, 8 /DATED, THE 03 RD JULY, 2019. KS SUNDARAM 1 /&$ :$ /COPY TO: 1. ./ APPELLANT 2. /0. / RESPONDENT 3. ; () /CIT(A) 4. ; /CIT 5. $ / /DR 6. /GF.