ACIT-23(3), MUMBAI V. SHRI RAMLAL DAYALDAS KHANDUJA, MUMBAI

ITA 4153/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4560 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 11-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; TDS; Set aside; FORM 26AS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.4153/M/2018 ASSESSMENT YEAR: 2014-15 ACIT 23(3), ROOM NO.104, 1 ST FLOOR, MATRU MANDIR, TARDEV ROAD, MUMBAI - 400007 VS. M/S. RAMLAL DAYALDAS KHANDUJA, 4 TH FLOOR, AN HOUSE, 31SST ROAD, TPS-III, BANDRA (WEST), MUMBAI 400 050 PAN: AAHPK4195P (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : MS. DINKLE HARIYA, A.R. REVENUE BY : SHRI JOTHILAKSHMI NAYAK, D.R. DATE OF HEARING : 07.01.2020 DATE OF PRONOUNCEMENT : 19.02.2020 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENU E AGAINST THE ORDER DATED 26.03.2018 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2014-15. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: (1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ACCEPTING THE ASSESSEE'S CONTEN TION THAT THE DIFFERENCE IN THE RECEIPTS SHOWN IN THE AUDIT REPORT AND FORM 26AS US REFLECTED IN PREVIOUS AND SUBSEQUENT YEARS, IGNORING THE FACT THAT THE AUDITO R HAS CLEARLY POINTED OUT THAT THE ASSESSEE HAS NOT MAINTAINED CONSISTENT POLICY OF AC COUNTING ? (2)THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE AO BE RESTORED. ITA NO.4153/M/2018 M/S. RAMLAL DAYALDAS KHANDUJA 2 (3) THE APPELLANT CRAVES LEAVE TO ADD, DELETE, ALTE R, AMEND AND MODIFY ANY OR ALL GROUNDS OF APPEAL.' 3. THE ONLY ISSUE RAISED BY THE REVENUE IS AGAINST THE ORDER OF LD. CIT(A) WHEREIN THE LD. CIT(A) HAS ACCEPTED THE CONTENTIONS OF THE ASSESSEE THAT DIFFERENCE IN THE RECEIPTS SHO WN IN THE AUDIT REPORT AND FORM NO.26AS WERE DULY REFLECTED IN THE PREVIOUS AND SUBSEQUENT ASSESSMENT YEARS AND THUS OFFERED TO TAX. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED R ETURN OF INCOME ON 29.11.2014 DECLARING THE INCOME OF RS.25, 37,770/-. THEREAFTER THE CASE OF THE ASSESSEE WAS SELECTED FO R SCRUTINY UNDER CASS AND STATUTORY NOTICES WERE DULY ISSUED A ND SERVED UPON THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THERE WAS A MISMAT CH BETWEEN THE RECEIPTS AS PER FORM NO.26AS AND ANNUAL ACCOUN TS OF THE ASSESSEE. THE TOTAL RECEIPTS AS PER FORM 26AS WERE RS.6,41,28,692/- WHEREAS THE TOTAL RECEIPTS AS PER P&L ACCOUNT WERE RS.5,07,74,479/- WHILE TOTAL RECEIPT AS PER TD S CERTIFICATES WERE RS.7,05,67,187/-. ACCORDINGLY, THE ASSESSEE W AS PROVIDED A COPY OF THE FORM 26AS VIDE ORDER SHEET ENTRY DATE D 23.09.2016 WITH THE DIRECTION TO RECONCILE THE SAME FAILING WH ICH WHY THE DIFFERENCE BETWEEN FORM NO.26AS AND RECEIPTS AS WEL L AS P&L ACCOUNT WHICH COMES TO RS. 2,24,74,445/- SHOULD NO T BE ADDED TO THE INCOME OF THE ASSESSEE AS UNACCOUNTED INCOME . THEREAFTER, THE ASSESSEE WAS ALLOWED SEVERAL OPPORT UNITIES. HOWEVER, NO RECONCILIATION WAS FILED. ON 13.12.201 6 THE LD. A.R. SUBMITTED THE LEDGER OF BARTEC INDIA PVT. LTD. FOR F.Y. 2010-11, 2011-12 & 2012-13 AND ALSO LEDGER OF M/S. ENGINEER INDIA LTD. FOR F.Y. 2014-15 THAT TOO WITHOUT ANY EXPLANATION. ON 05.12.2016 THE ASSESSEE FILED RECONCILIATION BEFORE THE AO. THE ITA NO.4153/M/2018 M/S. RAMLAL DAYALDAS KHANDUJA 3 AO HOWEVER, DID NOT ACCEPT THE SAME AND CAME TO A CONCLUSION THAT MERE SUBMISSION BY THE ASSESSEE THAT THE PAYME NTS WERE OFFERED IN F.Y. 2010-11 TO 2014-15 BY FILING THE CO PIES OF LEDGER ACCOUNTS COULD NOT BE ACCEPTED AND THUS THE AO CALC ULATED THE DIFFERENCE AS UNACCOUNTED INCOME AT RS.2,24,74,445/ - WHICH WAS CALCULATED BY SUBTRACTING RS.4,73,50,036/- FROM RS.7,24,00,481/- AND ADDED THE SAME TO THE INCOME O F THE ASSESSEE. 5. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) ALL OWED THE APPEAL OF THE ASSESSEE AFTER CONSIDERING THE CONTEN TIONS AND ARGUMENTS OF THE ASSESSEE BY OBSERVING AND HOLDING AS UNDER: 5.2 GROUND NO.1:- THIS GROUND RELATES TO THE MISMATCH IN RECEIPTS AS PER TDS CLAIMED BY THE ASSESSEE & RECEIPTS AS PER P& L ACCOUNT. DURING COURSE OF TH E ASSESSMENT PROCEEDINGS, THE AO MERELY ON THE BASIS OF THE AUDITOR'S QUALIFICATI ON REPORT IN FORM NO. 3CB CONCLUDED THAT THE APPELLANT WAS NOT FOLLOWING CONS ISTENCE ACCOUNTING POLICY AND WAS NOT ABLE TO RECONCILE THE MISMATCH. HOWEVER, IT WAS NOTED THAT THE AUDITOR'S QUALIFICATION REPORT WAS GENERAL IN NATURE AND DOES NOT BEAR ANY RELEVANCE TO THE FACTS AND CIRCUMSTANCES OF THE CASE. IT WAS CONTEND ED THAT THE RECEIPTS WERE OFFERED TO TAX EITHER IN PRECEDING YEARS OR IN SUBS EQUENT YEARS AND TDS WAS CLAIMED WHEN THE PARTY DEDUCTED THE TDS. AND THE SAME CONTE NTION WAS MADE DURING THE ASSESSMENT PROCEEDINGS. DURING COURSE OF THE ASSESS MENT PROCEEDINGS, THE APPELLANT SUBMITTED LEDGERS OF ALL THE PARTIES FOR THE F.Y. 2010-11, 2011-12, 2012- 13, 2013-14, 2014-15 TO SUBSTANTIATE HIS CLAIM. THE SAME WAS ALSO INCLUDED IN THE ASSESSMENT ORDER. HOWEVER NO EXAMINATION WAS MADE B Y THE AO IN RESPECT OF THE LEDGERS ACCOUNT TO ARRIVE AT CONCLUSION AGAINST THE CLAIM THAT RECEIPTS WERE TAXED EITHER IN PRECEDING YEARS OR IN SUBSEQUENT YEARS. T HE SAME LEDGER ACCOUNTS OF PARTIES WERE ALSO FURNISHED DURING APPELLATE PROCEE DINGS AND THE SAME HAVE BEEN EXAMINED CAREFULLY AND IT WAS FOUND THAT THE MISMAT CH OCCURRED DUE TO THE REASON THAT RECEIPTS WERE BOOKED BY THE APPELLANT IN PRECE DING YEARS OR IN SUBSEQUENT YEARS AND TDS WAS CLAIMED WHENEVER IT WAS DEDUCTED BY THE PARTIES. ONCE A RECEIPT HAS ALREADY BEEN OFFERED FOR TAX IN PRECEDING YEAR OR SUBSEQUENT YEAR, IT CANNOT BE TAXED AGAIN IN ANY OTHER YEAR. THE AO COMPLETELY IG NORED THE BOOKS OF ACCOUNT FURNISHED BY THE APPELLANT AND DID NOT MAKE ANY EXA MINATION AND MERELY ON BASIS OF AUDITORS QUALIFICATION REPORT, CONCLUDED THAT TH E APPELLANT DID. NOT FOLLOW THE CONSISTENT ACCOUNTING POLICY. THE AO FAILED TO APPR ECIATE THAT THE RECEIPTS HAVE BEEN OFFERED FOR TAX EITHER IN PRECEDING YEARS OR I N SUBSEQUENT YEARS. IN VIEW OF THE ABOVE I HOLD THAT THE ADDITION ON THE BASIS OF MISM ATCH CANNOT BE MADE MERELY ON THE BASIS OF AUDITOR'S QUALIFICATION REPORT, INSTEA D OF THAT FACTS AND CIRCUMSTANCES OF THE CASES SHOULD BE LOOKED IN TO MAKE ANY ADDITION. IN VIEW OF THE ABOVE, IT IS HELD THAT THE APPELLANT HAD OFFERED THE RECEIPTS FOR TAX EITHER IN PRECEDING YEAR OR IN ITA NO.4153/M/2018 M/S. RAMLAL DAYALDAS KHANDUJA 4 SUBSEQUENT YEAR AND THE SAME CANNOT BE ADDED IN THE YEAR UNDER CONSIDERATION. HENCE, THE AO IS DIRECTED TO DELETE THE ADDITION OF RS. 2,26,74,445/-AND THIS GROUND OF APPEAL IS ALLOWED. 6. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT IN THIS CASE THERE WERE APP ARENTLY SOME DIFFERENCES IN THE TOTAL RECEIPT AS PER FORM 26AS A ND RECEIPTS AS PER P&L ACCOUNT. THE ASSESSEE FILED RECONCILIATION BEFORE THE AO SUBMITTING THAT ALL THESE RECEIPTS WERE DULY ACC OUNTED FOR FROM 2010-11 ONWARDS TO 2014-15 AND ALL THE LEDGER ACCOUNTS WERE ALSO FILED OF M/S. BARTEC INDIA PVT. LTD., ENG INEER INDIA LTD., MANGALORE REFINERY PETRO CHEMICAL LTD. AND M/ S. DCORE EXPORTS LTD. IN SUPPORT OF THE RECONCILIATION. WE N OTE THAT THE ONLY BASIS ON WHICH THE AO REJECTED THE RECONCILIAT ION OF THE ASSESSEE IS THAT THE ASSESSEE HAS NOT PROPERLY EXPL AINED THE ITEMS OF DIFFERENCE AND THE AO HAS MERELY BASED HI S CONCLUSION ON THE BASIS OF AUDIT REPORTS . THE LD. CIT(A) HAS RECORDED A FINDING THAT NOTE IN THE AUDIT REPORT WAS GENERAL I N NATURE AND DOES NOT BEAR ANY RELEVANCE TO THE FACTS AND CIRCUM STANCES OF THE CASE. THE LD. CIT(A) NOTED THAT THE RECEIPTS W ERE OFFERED TO TAX EITHER IN THE PRECEDING OR SUBSEQUENT YEARS WHE REAS TDS WAS CLAIMED IN THE YEAR OF DEDUCTION. THE LD. CIT( A) HAS NOTED THAT IN THE LEDGER ACCOUNTS OF ALL THE PARTIES, ALL RECEIPTS WERE PROPERLY SHOWN AND OFFERED TO TAX AND ACCORDINGLY H ELD THAT THE RECEIPT WHICH IS OFFERED TO TAX IN THE PRECEDING AN D SUBSEQUENT YEARS COULD NOT BE BROUGHT TO TAX IN THE CURRENT Y EAR AS IT WOULD AMOUNT TO DOUBLE TAXATION. CONSIDERING THESE FACTS ON RECORD AND THE CONTENTIONS MADE BY THE RIVAL PARTIES, WE A RE OF THE VIEW THAT THE ASSESSEE HAS DULY EXPLAINED THESE DIFFEREN CES AND THERE IS IN FACT NO DIFFERENCE IN ACCOUNTING FOR THE RECE IPTS BY THE ASSESSEE. THUS, WE DO NOT FIND ANY FAULT OR INFIRM ITY IN THE ORDER ITA NO.4153/M/2018 M/S. RAMLAL DAYALDAS KHANDUJA 5 OF LD. CIT(A) AND ACCORDINGLY, THE ORDER IS UPHELD BY DISMISSING THE APPEAL OF THE REVENUE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19.02.2020. SD/- SD/- (SAKTIJIT DEY) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 19.02.2020. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.