9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (1) TMI 562 - AT - Income TaxReopening of assessment - reasons to believe - difference in TDS certificate and receipts shown in the P&L account - Held that - In light of the ratio laid down by in the case of CIT vs. Orient Craft Ltd. (2013 (1) TMI 177 - DELHI HIGH COURT) find that the above decision would be squarely applicable in the present case because no fresh material is brought by the Revenue on record but the assessment has been reopened on the basis of the Form 26AS and the TDS certificate issued by the employer of the assessee, hence, no tangible material was before the AO apart from the TDS certificate, to form a belief that income has escaped assessment. Also further find that it is a settled law that an assessment could not be reopened only on the basis of difference in TDS certificate and receipts shown in the P&L account. In the background of the aforesaid discussions and respectfully following the precedents, hold that the reopening of assessment is not valid. - Decided in favour of assessee
Issues:
1. Validity of reopening assessment under Section 147 2. Treatment of banquet tip income as salary 3. Disallowance of expenses claimed by the assessee Analysis: Issue 1: Validity of reopening assessment under Section 147 The appellant challenged the reopening of assessment under Section 147, contending that the assessing officer did not comply with statutory conditions and procedures, and there was no live nexus between the reasons recorded and the belief that income had escaped assessment. The AO relied on Form 26AS and TDS certificate to reopen the assessment. The Tribunal referred to the case law of CIT vs. Orient Craft Ltd. and other tribunal decisions to determine that the assessment could not be reopened solely based on differences in TDS certificates and P&L account entries. The Tribunal held that the reopening of assessment was not valid and quashed it. Issue 2: Treatment of banquet tip income as salary The AO treated the banquet tip income received by the assessee as part of salary income, disallowing the expenses claimed by the assessee. The appellant argued that the banquet tip income should be categorized under 'profits and gains from business and profession' rather than 'salary,' as it was a reimbursement of expenses incurred. However, the AO concluded that the banquet tip income was part of the regular duties performed by the assessee and not derived from a separate business. Consequently, the AO treated the amount as salary income. The Tribunal did not adjudicate on this issue due to quashing the assessment order. Issue 3: Disallowance of expenses claimed by the assessee The AO proposed to disallow the expenses claimed by the assessee against the banquet tip income, citing lack of proper documentation and cash payments below the specified limit. The appellant explained that expenses were incurred for services related to banquet handling, which were not known to the employer. The AO, however, concluded that the expenses were not separately maintained by the assessee and disallowed them. As the assessment order was quashed, this issue did not require further adjudication. In conclusion, the Tribunal allowed the appeal, quashing the assessment order due to the invalid reopening of assessment under Section 147. The issues related to the treatment of banquet tip income and disallowance of expenses were not addressed in detail as the assessment order was set aside.
|
