Balasaheb Savlaram Kature, Pune V. Principal Commissioner of Income-Tax - 3, Pune

ITA 343/PUN/2021

AI Insights

The case involves Balasaheb Savlaram Kature, who is engaged in providing tent house services, including renting out mandap materials and contracting mandap setups for events. For the assessment year 2015-16, Kature filed a return declaring a total income of Rs.31,92,450. The case was selected for 'Limited Scrutiny' due to discrepancies in reported contract receipts/fees. The Pr.CIT-3 noted a mismatch of Rs.7,21,225 between the income reported in the Income Tax return and the Service Tax return, which was not substantiated by any evidence. The Pr.CIT-3 found the original assessment to be erroneous and prejudicial to the interest of the Revenue, leading to the setting aside of the assessment order and directing a fresh assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137750 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-03-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 25-08-2021
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, ‘A’ PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.343/PUN/2021 नधा रण वष / Assessment Year : 2015-16 Balasaheb Savlaram Kature, 93/773, Laxminagar, Parvati, Pune 411 037 Maharashtra PAN : AGOPK8013F Vs. Pr.CIT-3, Pune Appellant Respondent आदेश / ORDER PER R.S. SYAL, VP : This appeal by the assessee is directed against the order dated 19-03-2020 passed by the Pr.CIT-3, Pune u/s.263 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2015-16. 2. The appeal is time barred by 444 days. The assesee has filed an affidavit explaining the reasons. We are satisfied with the reasons so stated. The delay is, therefore, condoned and the appeal is admitted for disposal on merits. Assessee by Shri Kishor B. Phadke Revenue by Shri Keyur Patel Date of hearing 06-03-2023 Date of pronouncement 06-03-2023 ITA No.343/PUN/2021 Balasaheb Savlaram Kature 2 3. Succinctly, the facts of the case, are that the assessee is engaged is rendering Tent house services including providing Mandap material on rent and also taking on contract making Mandap during events. A return was filed for the year declaring total income at Rs.31,92,450/-. The assessment u/s.143(3) of the Act was completed at the returned income. The ld. Pr.CIT observed that the case was selected for ‘Limited Scrutiny’ on three issues including, `Contract receipts/fees mismatch’. A mismatch/difference of Rs.7,21,225/- was found as per the Service tax return and Income-tax return, which was not proved with any evidence. He observed that the contention of the assessee about the difference being on account of Advance received for rendering services, was not substantiated with any confirmation of the counter party. Ergo, the assessment order was held to be erroneous and prejudicial to the interest of Revenue, inter alia, on this score, for the Assessing Officer (AO) not having verified the facts and law on this point. This is how, the ld. Pr.CIT set-aside the assessment order and directed the AO to decide, inter alia, this issue in fresh assessment proceedings. 4. We have heard the rival submissions and gone through the relevant material on record. One of the criterion for selection of ITA No.343/PUN/2021 Balasaheb Savlaram Kature 3 case for limited scrutiny was `Contract receipts/fees mismatch’. Howbeit, there was a mismatch of Rs.7,21,225/- between the amount of revenue as per service tax return and the amount offered as per income-tax return inasmuch as less revenue was shown in income tax return. The ld. AR submitted that an advance of Rs.8,10,360/- was received from the Tahsildar (Taluka – Haveli) on 31-03-2015, which was inclusive of service tax of Rs.89,135/- and the remaining amount of Rs.7,21,225/- was not income for the current year and hence offered as turnover in the succeeding year. However, no confirmation of such an advance was filed at the stage of assessment or even up to the Tribunal level. The ld. DR invited our attention towards a copy of the service tax return filed by the assessee. Under the column B1.2 “Amount received in advance for services for which bills/invoices/challans or any other documents have not been issued”, the amount has been shown as Nil in the service tax return for the last quarter, i.e. Jan to March, 2015. This obviously contravenes what the assessee made out a case and what is the position as per the service tax return. Whereas the ld. AR contended that a sum of Rs.7,21,225/- was the amount received as advance from its customer for rendering the services, the assessee ITA No.343/PUN/2021 Balasaheb Savlaram Kature 4 itself mentioned Nil as the amount received in advance, in its service tax return. This apparent contradiction ought to have been examined by the AO who, after seeing reconciliation filed by the assessee showing some amount as advance, did not go further to ascertain as to why the assessee had declared Nil figure of advance in its service tax return. Lesser amount of revenue shown in income tax return vis-à-vis the service tax return, if not successfully proved, would have gone to swell income for the year under consideration. Under such circumstances, we are satisfied that the assessment order passed by the AO on this score was erroneous and prejudicial to the interest of the Revenue which was rightly taken cognizance of by the ld. Pr.CIT u/s.263 of the Act. We, therefore, uphold the impugned order. 5. In the result, the appeal is dismissed. Order pronounced in the Open Court on 06 th March, 2023. Sd/- Sd/- ( S.S. VISWANETHRA RAVI) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; िदनांक Dated : 06 th March, 2023 सतीश ITA No.343/PUN/2021 Balasaheb Savlaram Kature 5 आदेश की ितिलिप अ ेिषत/Copy of the Order is forwarded to: 1. अपीलाथ / The Appellant; 2. थ / The Respondent 3. DR, ITAT, ‘A’ Bench, Pune 4. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune Date 1. Draft dictated on 06-03-2023 Sr.PS 2. Draft placed before author 06-03-2023 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *