KANNADASAN,PORT BLAIR V. DCIT, CIRCLE 3(2), PORT BLAIR

ITA 1726/KOL/2025

AI Insights

The case involves an appeal by Kannadasan M/s India Computer Technology against the order of the National Faceless Appeal Centre, Delhi, for the Assessment Year 2014-15. The primary issues in the appeal were the additions made to the assessee's income concerning discrepancies in the reported sundry creditors and differences in income receipts as per Form 26AS and the ITR. The Tribunal found that the CIT (A) had misconstrued the facts regarding the sundry creditors and thus set aside that part of the order. For the issue related to Form 26AS, the Tribunal acknowledged the partial explanation provided by the assessee for the discrepancy and adjusted the income addition accordingly.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790931 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 31-07-2025
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PANKAJ PANDEY
• Assessee Lawyers: S S.M. SURANA; SUNIL SURANA; ARS
• Keywords: Set aside; FORM 26AS

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No.1726/KOL/2025 (Assessment Year: 2014-15) KANNADASAN M/s India Computer Technology, M.G. road, Middle Point, Port Blair, Andaman & Nicobar Islands, PIN-744103 Vs. DCIT, Circle 3(2) 210, Sahidpur Income Tax Office, Port Blair, Andaman and Nicobar Islands PIN-744101 (Appellant) (Respondent) PAN No. ANHPK2600G Assessee by : S/shri S.M. Surana, & Sunil Surana, ARs Revenue by : Shri Pankaj Pandey, DR Date of hearing: 13.11.2025 Date of pronouncement: 02.12.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 24.06.2025 for the AY 2014-15. 2. The assessee has raised two effective issues in the various grounds of appeal. 3. The first issue is against the order of ld. CIT (A) restricting the addition to ₹14,54,029/- as against the addition made by the ld. AO of ₹89,89,366/- on account of difference between the sundry creditors as on 31.03.2013, vis-à-vis 31.03.2014. Printed from counselvise.com Page | 2 ITA No. 1726/KOL/2025 KANNADASAN A.Y. 2014-15 3.1. The facts in brief are that the ld. AO during the course of assessment proceedings noted from the balance sheet of the assessee that total sundry creditors as on 31.03.2013, were ₹18,10,99,930/- as against the sundry creditors as on 31.03.2014, of ₹19,00,89,296/-. According to the ld. AO, the assessee was required to reconcile the same. However, the assessee could not explain the same. Finally, after issuing show cause notice to the assessee on 09.12.2016, an addition of ₹89,89,366/- was made to the income of the assessee. 3.2. In the appellate proceedings, the ld. CIT (A) deleted the said addition after taking into account the submissions and contentions of the assessee. However the ld CIT(A) has gone a step further and made an addition of ₹14,54,029/- by holding that the sundry creditors as per the audited Balance Sheet for A.Y. 2014-15, were ₹19,00,89,296/- whereas in the return of income, the appellant has shown sundry creditors of ₹19,15,43,325/- and hence, there is a different of ₹14,54,029/-. The ld. CIT (A) page no.9 of the appellate order extracted both the relevant part of the ITR as well as the balance sheet and compared the figures. Thus, the ld. CIT (A) partly allowed the appeal. 3.3. After hearing the rival contentions and perusing the materials available on record, we find that the ld. CIT (A) totally misconstrued the facts as per the return of income as well as the balance sheet of the assessee. We note that in the balance sheet the total current liabilities were shown at ₹19,15,43,325/-. The breakup thereto is as under:- “God Account 101, Sundry Creditors 19,00,89,296/-, Provision for outstanding liabilities of ₹14,53,938/-, total ₹19,15,43,325/-. Printed from counselvise.com Page | 3 ITA No. 1726/KOL/2025 KANNADASAN A.Y. 2014-15 3.4. We observe that the ld. AO has picked up a figure of sundry creditors alone, whereas in the return of income the total liabilities has been shown. Therefore, there is no difference in the creditors as per the balance sheet vis-à-vis ITR. Accordingly, we set aside the order of ld. CIT (A) and direct the ld. AO to delete the addition. The first issue is allowed. 4. The second issue raised by the assessee is against the order of ld. CIT (A) partly allowing the appeal by restricting the addition to ₹65,94,494/- as against the total addition made by the ld. AO of ₹6,59,44,937/-, which was on account of difference between the amount shown in 26AS vis-à-vis the amount shown in ITR. 4.1. The facts in brief are that the ld. AO during the course of assessment proceedings, observed that the total receipts as per ITR were ₹18,86,22,487, whereas the amount appearing in form no.26AS was ₹25,45,67,424/-. Accordingly, the ld. AO asked the assessee to reconcile the same. The ld. AO after issuing show cause notice on 09.12.2010, added the amount of difference to the income of the assessee. 4.2. In the appellate proceedings, the ld. CIT (A) partly sustained the addition by directing the ld. AO to made the addition at the rate of 10% of the difference between the form 26AS vis-à-vis ITR. 4.3. After hearing the rival contentions and perusing the materials available on record, we find that the assessee has explained 90% of the total difference as calculated by the ld. AO on account of difference between amount of income shown in 26AS and the ITR. It was the submission of the assessee that when the assessee has explained the substantial part of difference then no addition was Printed from counselvise.com Page | 4 ITA No. 1726/KOL/2025 KANNADASAN A.Y. 2014-15 called for on this count, however, we do not find merit in the said contention of the assessee as when there is a difference that means, the assessee has shown the income in ITR short by the said amount. We note that the assessee furnished before the ld. CIT (A) a chart comparing the contract receipts as per the profit and loss account and as per form 26AS from A.Y. 2012-13 to 2015-16 and proved that cumulative gross receipt as per the audited financials were ₹78,27,50,907/- vis-à-vis gross receipt as per the form no.26AS at ₹79,74,94,996/- and thereby proved that the marginal difference of ₹47,44,059/- between the two. In our opinion, since the assessee has explained the difference between the receipts as per the ITR and as per form no.26AS to a greater extent and the difference which existed was only ₹47,44,089/-. Accordingly, the income should be estimated on the said difference. We note that the ld. AO has already accepted the net profit of 2.52% for the instant year as is evident from page no.59 as per the tax audit report. Accordingly, we are of the view that it would be reasonable if the income is assessed at the rate of 4% of the difference of ₹47,44,089/-. Accordingly, we set aside the order of ld. CIT (A) and direct the ld. AO to make the addition of ₹1,89,763/-, which is equal to 4% of ₹47,44,089/-. The appeal of the assessee is partly allowed. 5. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 02.12.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 02.12.2025 Sudip Sarkar, Sr.PS Printed from counselvise.com Page | 5 ITA No. 1726/KOL/2025 KANNADASAN A.Y. 2014-15 Copy of the Order forwarded to: BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. Printed from counselvise.com "