K Star Manufacturing Co., Surat V. Asstt. Commissioner of Income Tax, Central Circle-4, Surat

ITSSA 129/SRT/2023

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 4540 (ITAT-SURAT)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-12-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 14-12-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 04-09-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; TDS
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM आयकर(खोज-और-जÞती)सं./IT(SS)A No.129/SRT/2023 Assessment Year: (2016-17) (Physical Hearing) M/s. K. Star Manufacturing Co. Plot No.102-A, Asarawala Compound, Opp. Bambawadi, Katargam, Fulpada Road, Surat – 395004. Vs. The ACIT, Central Circle -4, Surat èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AAEFJ9473A (Assessee) (Respondent) Assessee by Shri Nitin Gheewala, CA Respondent by Shri Ritesh Mishra, CIT(DR) Date of Hearing 15/12/2023 Date of Pronouncement 21/12/2023 आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned appeal filed by the Assessee, pertaining to Assessment Year (AY) 2016-17, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals)-4, Surat [in short “the ld. CIT(A)”], in Appeal No.CIT(A),Surat-4/10548/2018-19, dated 11.07.2023, which in turn arises out of an assessment order passed by Assessing Officer u/s 143(3) r.w.s. 153A of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), dated 29.12.2018. 2. The grounds of appeal raised by the assessee are as follows: “1. In law and in the facts and circumstances of the Assessee’s case Commissioner of Income Tax (Appeals) has erred in not deleting the addition of Rs.14,23,838/- as unaccounted job work receipt in spite of the fact that said amount was received as advance against job work income from D. Navinchandra Exports Pvt. Ltd. which was adjusted against job work charges received in subsequent year. The Commissioner of Income Tax (Appeals) should have deleted the addition of Rs.14,23,838/-. 2 IT(SS)A.129/SRT/2023/AY.2016-17 K. Star Manufacturing 2. In law and in the facts and circumstances of the Assessee’s case Commissioner of Income Tax (Appeals) has erred in not deleting addition of Rs.3,74,443/- as unaccounted income on the basis of rough paper seized during the course of survey from third party. The Commissioner of Income Tax (Appeals) should have deleted the addition of Rs.3,74,443/-. 3. In the facts & circumstances of the case, assessee reserves its right to add, alter, modify, edit and/or delete any of the grounds of appeal.” 3. At the outset, Ld. Counsel for the assessee informs the Bench that assessee does not wish to press ground no.2, therefore we dismiss the ground no.2, as not pressed. 4. Now, coming to ground no.1 raised by the assessee which relates to addition of Rs.14,23,838/- on account of unaccounted job work receipt. 5. Brief facts qua the issue are that during the assessment proceedings, it was noticed by Assessing Officer from the ITS details which also contains 26AS statement, that total contract receipt appearing in the 26AS statement is Rs.28,17,80,087/- whereas assessee has offered receipts from contract at Rs.28,03,56,249/-. Therefore, the difference of Rs.14,23,838/- has been suppressed by the assessee on account of contract receipts. It further noticed by AO that the credit for total TDS appearing in the 26AS statement at Rs.30,61,360/- perfectly matches with the claim of TDS in the return of income filed by the assessee. Thus, Assessing Officer noted that it is clear that assessee has not offered the contract receipts to the extent of Rs.14,23,838/- (Rs.28,17,80,087 – Rs.28,03,56,249). Hence, Assessing Officer made the addition of Rs.14,23,838/-. 6. Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A), who has dismissed the appeal of the assessee. The ld CIT(A) held that assessee has failed 3 IT(SS)A.129/SRT/2023/AY.2016-17 K. Star Manufacturing to satisfactorily explain the reason for not offering Rs.14,23,838/- for taxation during the year under consideration, therefore addition made by the AO was confirmed by ld CIT(A).Aggrieved by the order of ld. CIT(A), the assessee is in appeal before us. 7. The Ld. Counsel for the assessee submitted that the difference of Rs.14,23,838/- is only for the reason that M/s. D. Navin had given advances of Rs.14,23,838/-, on which, as per the provision of the Act, the TDS was deducted. The Ld. Counsel also stated that advance of Rs.14,23,838/- was adjusted against the labour bill for the subsequent year. In support of the contention, the assessee produced the opening balance, labour bills, total payment receipts and balance advance payment etc. The assessee also furnished ledger account of D. Navin to explain that Rs.14,23,838/- which represents advance received on which TDS was deducted. 8. On the other hand, the ld. Sr. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. 9. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. The Ld. Counsel for the assessee submitted before us following documents and evidences, which were already submitted before the lower authorities, viz: (1) Ledger account of D. Navinchandra Exports Pvt. Ltd. in the books of assessee (vide 4 IT(SS)A.129/SRT/2023/AY.2016-17 K. Star Manufacturing Pb.13 to 148), (2) Ledger account of assessee in the books of D. Navinchandra Exports Pvt. Ltd. (vide Pb.149 to 173). 10. We have gone through the above documents and observed that on advance of Rs.14,23,838/-, the TDS was adequately deducted; therefore genuineness of the transaction should not be doubted. From the copy of the ledger accounts i.e. copy of D. Navin account in the books of the assessee and copy of the assessee's account in the books of D. Navin, it can be seen that the assessee has correctly shown the contractual receipts. The difference of Rs.14,23,838/- is only for the reason that D. Navin had paid advance of Rs.14,23,838/- on which, as per the Income Tax Act, the assessee had deducted TDS. The ledger account of D. Navin clearly shows that on 31.3.2016, assessee has deducted TDS Rs.14,239/-, on such advance of Rs.14,23,838/-. The ledger account also shows specifically that TDS in respect of other items were also deducted. Thus, the ledger account of K. Star Manufacturing Co. in the books of D. Navin for FY.2015-16 and 2016-17, reflects the following labour receipts and amount paid to K. Star Manufacturing. Particulars Amount (Rs) Opening balance 1,75,67,763 Total labour bills during the period 28,03,56,249 Total 29,79,24,012 Total amount paid during the year 29,62,86,490 TDS 30,61,360 Total of credit side 29,93,47,850 Balance advance payment 14,23,838 The advance of Rs.14,23,838/- was adjusted against the labour bill for the subsequent year. In support of which the assessee has filed ledger account of K. Star Manufacturing Co. in the books of D. Navin. Therefore, on perusal of aforesaid submission of the assessee and ledger account, it is seen that as on 31.03.2016 the assessee has shown 5 IT(SS)A.129/SRT/2023/AY.2016-17 K. Star Manufacturing Rs.l4,23,838/-as advance in its books. The claim of the assessee that this advance amount was adjusted against the labour bill for the subsequent year is verifiable from the submission made by the assessee. Hence, considering the factual position as narrated above, we delete the addition of Rs.14,23,838/-. 11. In the result, ground no.1 raised by the assessee is allowed. 12. In the combined result, appeal filed by the assessee is partly allowed in above terms. Order is pronounced on 21/12/2023 in the open court. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER lwjr /Surat Ǒदनांक/ Date: 21/12/2023 SAMANTA Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat