2017 (8) TMI 1635 - AT - Income Tax

Unaccounted the receipts shown in the TDS certificate - revised statement of income - gross income declared by the assessee is more than the receipts shown in TDS certificates - primary objection of the assessee is that assessee filed the revised computation of income before the AO showing the additional income against which, expenditure was claimed - HELD THAT - In our opinion, the argument of Counsel for assessee is not verified by the lower authorities and the turnover and expenditure shown by the assessee through the revised statement of account before AO was unvouched and it is required to be examined by the lower authorities with reference to books of account maintained by assessee, then only it is possible to say whether assessee has unaccounted the receipts shown in the TDS certificate produced by it. Accordingly, in the interest of justice, we remit the entire issue in- dispute to the file of AO with a direction to assessee to explain the additional receipts shown by the assessee and additional expenditure claimed by assessee with reference to the books of account maintained by the assessee. Accordingly, the issue in dispute is remitted to the file of AO for fresh consideration to decide the same after giving opportunity of hearing to assessee. Appeal of assessee is partly allowed for statistical purposes.

Summary

Issues:
1. Discrepancy in gross receipts as per TDS certificates and profit and loss account.
2. Treatment of the difference between receipts as income.
3. Lack of confirmation from telecom operators for reimbursement.
4. Discrepancy between ledger accounts and bank statements.
5. Reconciliation of revised computation of income.

Analysis:
1. The appeal addressed the disagreement between the gross receipts per TDS certificates and the profit and loss account. The assessee argued that the comparison should include reimbursements with taxes withheld. The authorities, however, treated the variance as income without proper basis.

2. The question of whether the difference between TDS receipts and profit and loss account constitutes income was central. The assessee contended that the amount represented reimbursement and should not be considered as revenue. The authorities disagreed, leading to the dispute.

3. The issue of lacking confirmation from telecom operators regarding reimbursements surfaced. The assessee failed to provide sufficient evidence beyond ledger accounts, resulting in the authorities dismissing the claim for lack of substantiation.

4. Another point of contention was the discrepancy between ledger entries and bank statements. The failure to match entries with telecom operators' accounts and the absence of clear reconciliation raised doubts about the legitimacy of the claimed reimbursements.

5. The revised computation of income introduced by the assessee aimed to offset additional income with claimed expenditures. However, the unverified nature of these adjustments prompted the appellate tribunal to remit the matter back to the assessing officer for a thorough examination based on proper accounting records.

In conclusion, the appellate tribunal partially allowed the appeal for statistical purposes, emphasizing the need for a detailed review of the discrepancies and supporting documentation to determine the actual income status accurately.