Shri Ram Chander, New Delhi V. ITO, New Delhi

ITA 4510/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58438 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 14-12-2011
• Assessment Year: 2008-2009
• Appeal Filed On: 10-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: K R MANJANI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI K.G. BANSAL ITA NOS. 4510/DEL/2011 ASSTT. YR: 2008-09 RAM CHANDER VS. ITO, WARD 38(2), K-3, SIDDH APPTS, PLOT NO. 107, NEW DELHI. I.P. EXTENSION, NEW DELHI. PAN/GIR NO. AEPPC7943H (APPELLANT) ( RESPONDENT ) APPELLANT BY : SHRI K.R. MANJANI ADV. RESPONDENT BY : MS. Y. KAKKAR SR. DR O R D E R PER R.P. TOLANI, J.M : THIS IS ASSESSEES APPEAL AGAINST CIT(A)S ORDER DA TED 8-8-2011, RELATING TO A.Y. 2008-09 . SOLE GROUND RAISED IS AS UNDER. THAT ON THE FACTS AND THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) HAS ERRED IN MAINTAINING THE ADDITION OF RS. 3,20,597/- ON ACCOUNT OF ALLEGED DIFFERENCE OF GROSS RECEIPT A S PER TDS CERTIFICATES AND GROSS RECEIPT AS SHOWN IN PROFIT & LOSS A/C WHICH WAS MADE BY THE AO WITHOUT APPRECIATING THE RECONCILIATION FURNISHED BY THE ASSESSEE BEFORE HIM ALONG WITH HIS EXPLANATION THAT THE ASSESSEE IN MAINTAINING TH IS ACCOUNT ON CASH BASIS. 2. LEARNED COUNSEL FOR THE ASSESSEE CONTENDS THAT T HE ASSESSEE MAINTAINS REGULAR BOOKS OF ACCOUNTS ON CASH BASIS, WHICH ARE DULY AUDITED. THE ASSESSEE HAD CREDITED THE RECEIPTS ON THE BASIS OF CASH SYSTEM. HOWEVER, THE ITA 4510/DEL/11 RAM CHANDER 2 TDS CERTIFICATES WERE ISSUED BY THE PAYERS IN RESPE CT OF PAYMENTS WHICH WERE CREDITED BUT NOT PAID TO ASSESSEE. SINCE THE A SSESSEE IS FOLLOWING CASH METHOD OF ACCOUNTING, THESE RECEIPTS WERE NOT INCLU DED IN THIS YEAR BUT IN THE NEXT YEAR WHEN THE RECEIPTS WERE REALIZED BY THE A SSESSEE. A COMPLETE RECONCILIATION WAS FILED BEFORE AO WHO DID NOT CONS IDER THE SAME AND MADE THE ADDITION. CIT(A) ALSO CONFIRMED THE ADDITION BY OBSERVING THAT TDS CERTIFICATE WAS NOT FILED. THUS, BOTH THE AUTHORITI ES FAILED TO APPRECIATE THE RECONCILIATION FILED BY THE ASSESSEE. THE RECONCILI ATION, WHICH WAS FILED BEFORE AO AND CIT(A), IS PLACED ON PAPER BOOK PAGE 10, SUMMARY OF WHICH IS AS UNDER: AMOUNT TDS CREDITED/PAID DEDUCTED TDS CERTIFICATES 85,83,256 190717 LESS: SERVICE TAX (INCLUDED IN RECEIPT) 1018527 7564729 ADD: PREVIOUS YEAR PAYMENTS ( ON CASH BASIS) 694930 NET RECEIPT SHOWN IN P&L A/C. 8259659 2.1. THUS, THE AMOUNT OF RS. 82,59,659/- OF NET REC EIPT TALLIED WITH THE AMOUNT CREDITED IN THE P&L A/C, WHICH IS AS UNDER: BY CONTRACT RECEIPTS 9087469 ADD: TDS 190717 9278186 8259659 ITA 4510/DEL/11 RAM CHANDER 3 2.2. THUS, AMOUNT OF RECEIPT SHOWN IN THE P&L A/C A ND THE TDS CERTIFICATES PARTICULARS HAVE BEEN FULLY RECONCILED , WHICH IS FURTHER EVIDENT FROM THE FACT THAT THE PREVIOUS YEARS RECEIPTS OF RS. 6,94,930/- HAVE BEEN INCLUDED AS THEY WERE REALIZED DURING THIS YEAR AND NO CORRESPONDING TDS IS CLAIMED IN THIS YEAR. THUS, THE ASSESSEE WAS ACCOUN TING FOR THE RECEIPTS ON CASH BASIS PERTAINING TO EARLIER YEAR, REALIZED DUR ING THE CURRENT YEAR AND THE ACTUAL CURRENT YEARS CASH RECEIPTS. THIS SYSTEM HA S BEEN CONSISTENTLY FOLLOWED BY THE ASSESSEE AND HAVING FURNISHED RECO NCILIATION, THERE WAS NO JUSTIFICATION IN MAKING THE ADDITION OF RS. 3,20,59 7/- TO ASSESSEES INCOME. 3. LEARNED DR SUPPORTED THE ORDER OF LOWER AUTHORIT IES. 4. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE RELEVANT MATERIAL AVAILABLE ON RECORD. APROPOS, ASSESSEES B OOKS OF ACCOUNTS, NO DISCREPANCY HAS BEEN POINTED OUT. BESIDES, THE CONS ISTENT METHOD OF ACCOUNTING ON CASH BASIS HAS BEEN ACCEPTED BY THE R EVENUE. 4.1. IN THIS METHOD, FOLLOWING RECEIPTS WILL BE INC LUDED IN THE P&L A/C. (I) RECEIPTS PERTAINING TO EARLIER YEAR, REALIZED DURIN G THIS YEAR. (II) RECEIPTS OF CURRENT YEAR, REALIZED DURING THE CURRE NT YEAR. 4.2. ON THIS BASIS, CONTRACT RECEIPTS, THOUGH ACCOU NTED FOR BY THE PAYERS, WILL BE ACCOUNTED FOR BY THE ASSESSEE IN THE YEAR O F REALIZATION. ACCORDING TO THE ASSESSEE, THE RECONCILIATION STATEMENT FURNISHE D AT PAGE 10 OF THE PAPER BOOK, WAS FILED BEFORE THE AO, WHICH, IN OUR VIEW, FULLY CORROBORATES THE ITA 4510/DEL/11 RAM CHANDER 4 VERSION OF THE ASSESSEE. THIS METHOD OF ACCOUNTING HAS BEEN CONSISTENTLY FOLLOWED BY THE ASSESSEE. THERE BEING NO DISCREPANC Y IN THE BOOKS, WE SEE NO JUSTIFICATION IN SUSTAINING THIS ADDITION. ON RE ALIZATION THE ASSESSEE WILL OFFER THE SAME IN THE SUBSEQUENT YEARS. THE ADDITIO N IS DELETED. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 06-01-2012. SD/- SD/- ( K.G. BANSAL ) ( R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 06-01-2012. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR