2010 (12) TMI 1257 - AT - Income Tax

Summary

Issues involved: Appeal against order of C.I.T.(A) for assessment year 2006-07; Addition of Rs. 3,70,240/- by AO; Confirmation of AO's action by Ld. CIT(A); Appeal by assessee before ITAT Kolkata.

Addition of Rs. 3,70,240/-:
The AO added Rs. 3,70,240/- to the assessee's income, stating it was outstanding balance from contract work for Simplex Concrete Piles (India) Ltd. Assessee explained it as retention money or security deposits not to be considered as turnover. Ld. CIT(A) upheld AO's decision, noting the balance sheet should reflect outstanding receivables under mercantile system of accounting. Assessee presented a letter from Simplex Concrete Piles (India) Ltd. confirming receipt of the amount, requesting deletion of the addition. ITAT Kolkata admitted additional evidence but found discrepancies in the letter, remitting the issue back to AO for re-decision after verification.

Conclusion:
ITAT Kolkata allowed the appeal of the Assessee for statistical purposes, ordering re-decision of the issue by the AO after considering additional evidences and providing a reasonable opportunity of being heard to the assessee.