ANAZEAL ANALYTICALS & RESEARCH PVT. LTD., MUMBAI V. DCIT, CIRCLE - 4(1)(2), MUMBAI

ITA 6933/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9653 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 04-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MICHAEL JERALD
• Keywords: Principle of natural justice; TDS
• Section: 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI G. MANJUNATH A , ACCOUNTANT MEMBER ITA NO. 6933 / MUM . /201 8 ( ASSESSMENT YEAR : 20 13 14 ) ANAZEAL ANALYTICALS & RESEARCH PVT. LTD. C 404, TTC INDUSTRIAL AREA MIDC, VILLAGE PAWANE NAVI MUMBAI 400 705 PAN AADCA6024E . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CIRCLE 4 (1)( 2 ), MUMBAI . RESPONDENT ASS ESSEE BY : MS. DINKLE HARIYA REVENUE BY : SHRI MICHAEL JERALD DATE OF HEARING 12 .0 2 .2020 DATE OF ORDER 13.03.2020 O R D E R PER SAKTIJIT DEY. J.M. T H IS APPEAL HAS BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 24 TH SEPTEMBER 2018, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 9 , MUMBAI, FOR THE ASSESSMENT YEAR 20 13 14. 2. T HOUGH, THE ASSESSEE HAS RAISED SEVERAL GROUNDS INCLUDING VIOLATION OF RULES OF NATURAL JUSTICE, HOWEVER, THE CORE ISSUE RELATES TO THE ADDITION OF ` 59,50,867, MADE ON ACCOUNT OF MISMATCH BETWEEN 2 ANAZEAL ANALYTICALS & RESEARCH PVT. LTD. THE INCOME CREDITED TO THE PROFIT & LOSS ACCOUNT AND INCOME AS REFLECTED IN FORM NO.26AS. 3. B RIEF FACTS ARE, THE ASSESSEE , A RESIDENT COMPANY , IS A GOVERNMENT APPROVED CLINICAL TESTING LABORATORY AND MAINLY CARRIES OUT TESTING OF DRUG AND PHARMACEUTICAL RAW MATERIAL AND FINISHED PRO DUCTS A S PER INDIAN AND INTERNATIONAL NORMS. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 29 TH SEPTEMBER 2013, DECLARING TOTAL INCOME OF ` 68,17,070. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICING A MISMATCH BETWEEN THE INCOME CREDITED TO THE PROFIT & LOSS ACCOUNT AND AS REFLECTED IN FORM NO.26AS, CALLED UPON THE ASSESSEE TO RECONCILE THE DIFFERENCE. FURTHER, IT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE THAT THE CONCERNED PARTIES HAVE ALREADY CLAIMED THE PAYM ENT MADE TO THE ASSESSEE AS EXPENDITURE AND HAVE ALSO DEDUCTED TAX AT SOURCE. IN RESPONSE, IT WAS SUBMITTED BY THE ASSESSEE THAT THE DIFFERENCE IN INCOME SHOWN AND AS REFLECTED IN FORM NO.26AS, WAS DUE TO DIFFERENT ACCOUNTING METHOD FOLLOWED BY THE PAYERS AND THE ASSESSEE. IT WAS SUBMITTED , WHILE THE ASSESSEE IS OFFERING INCOME ON ACCRUAL BASIS, THE PAYERS ARE CLAIMING EXPENDITURE ON ACTUAL PAYMENT BASIS. THE ASSESSING OFFICER , HOWEVER, WAS NOT CONVINCED WITH THE EXPLANATION OF THE ASSESSEE AND ADDED BACK T HE AMOUNT OF ` 59,50,867, TO THE INCOME OF THE ASSESSEE. 3 ANAZEAL ANALYTICALS & RESEARCH PVT. LTD. 4. L EARNED COMMISSIONER (APPEALS) ALSO SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER. 5. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , BEFORE THE ASSESSING OFFICER AS WELL AS THE FIRST APPELLAT E AUTHORITY, THE ASSESSEE HAS FURNISHED STATEMENT S RECONCILING THE DIFFERENCE BETWEEN THE INCOME CREDITED TO THE PROFIT & LOSS ACCOUNT AND INCOME SHOWN IN FORM NO.26AS. SHE SUBMITTED , PART OF THE INCOME REFLECTED IN FORM NO.26AS, HAS ALREADY BEEN OFFERED T O TAX BY THE ASSESSEE IN THE ASSESSMENT YEAR 2012 13, AS THE ASSESSEE IS OFFERING INCOME ON ACCRUAL BASIS. SHE SUBMITTED , SINCE THE PAYERS ARE CLAIMING EXPENDITURE ON ACTUAL PAYMENT BASIS, THE MISMATCH HAS ARISEN AS FORM NO.26AS IS ON THE BASIS OF THE TDS. SHE SUBMITTED , WITHOUT CON DUCTING ANY ENQUIRY, THE ASSESSING OFFICER HAS MADE THE ADDITION WHICH HAS BEEN CONFIRMED BY LEARNED COMMISSIONER (APPEALS). THUS, S HE SUBMITTED , THE ISSUE MAY BE RESTORED BACK TO THE ASSESSING OFFICER FOR FACTUAL VERIFICATION AND NECESSARY ENQUIRY AND CORRESPONDING TDS CREDIT SHOULD BE ALLOWED TO THE ASSESSEE. 6. THOUGH, LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER AND LEARNED COMMISSIONER (APPEALS), HOWEVER, HE SUBMITTED THAT THE ISSU E MAY BE VERIFIED BY THE ASSESSING OFFICER. 4 ANAZEAL ANALYTICALS & RESEARCH PVT. LTD. 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. UNDISPUTEDLY, THE ADDITION WHICH HAS BEEN DISPUTED BEFORE US IS ON ACCOUNT OF MISMATCH IN THE INCOME OFFERED BY THE ASSESSEE AND THE INCOME REFLECTED IN FORM NO.26AS. TO RECONCILE THE DIFFERENCE, THE ASSESSEE HAS SUBMI TTED THAT A PART OF THE PAYMENT AS REFLECTED IN FORM NO.26AS, WAS OFFERED AS INCOME ON ACCRUAL BASIS IN THE PRECEDING ASSESSMENT YEAR. AS IT APPEARS, THE AFORESAID CLAIM O F THE ASSESSEE HAS NOT AT ALL BEEN VERIFIED EITHER BY THE ASSESSING OFFICER OR BY LEARNED COMMISSIONER (APPEALS). EVEN , TO CROSS VERIFY ASSESSEES CLAIM, NO ENQUIRY HAS BEEN CONDUCTED WITH THE PAYERS. THEREFORE , IN OUR CONSIDERED OPINION, THE ISSUE REQUIRE S TO BE RESTORED BACK TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER PROPER ENQUIRY OF ASSESSEES CLAIM THAT PART OF THE INCOME HAS ALREADY BEEN OFFERED IN THE PRECEDING ASSESSMENT YEAR. IN CASE, ANY AMO UNT WHICH STILL REMAINS TO BE RECONCILED, THE SAME MAY BE TREATED AS INCOME OF THE ASSESSEE. HOWEVER, ASSESSEE SHOULD GET BENEFIT OF CORRESPONDING TDS AS PER LAW. WITH THE AFORESAID OBSERVATIONS, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN C OURT ON 13.03.2020 SD/ - G. MANJUNATH A ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 13.03.2020 5 ANAZEAL ANALYTICALS & RESEARCH PVT. LTD. COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI