2018 (5) TMI 43 - AT - Income Tax

Validity of assessment order u/s 144 - Held that - AO has passed assessment order u/s 144 of the Act. We do not find any infirmity in the order of the Assessing Officer passed u/s 144 of the Act because of the reason that at each and every stage assessee has failed to submit the requisite details. Therefore, on the perusal of the order itself it is apparent that because of non cooperation by the assessee the Assessing Officer did not have any alternative but to pass an order u/s 144 of the Act. - Decided against assessee Notice u/s 143 (2) not served on the assessee during the prescribed time - Held that - The order sheet and record on 07.10.2010 in response to notice u/s 143 (2) issued on 28.09.2010 Sh. Naresh remained present. Therefore, according to him assessee complied with the first notice on 07.10.2010 therefore it cannot be said that notice were not served to the assessee in time. In view of the above facts we do not find any merit of the ground No. 3 of the appeal of the assessee. Addition on account of gross receipts and works contract taxes - Held that - Undoubtedly it may also be on account of turnover not shown by the assessee. Further merely there is a difference between the gross turnover as per books of accounts and gross receipts as per Form No. 26AS the addition cannot be made. In fact such the difference would be the first trigger point for making further enquiries. In the present case the assessee has not made any attempt to reconcile the difference. Furthermore no reconciliation shown to us by the assessee also. Further the arguments of the assessee cannot be ignored that there are certain unmatched entries in form no 26AS. In view of this we set aside this ground of appeal back to the file of the Ld. Assessing Officer with a specific direction to the assessee to produce the confirmed ledger accounts of the assessee from the books of accounts of its principal to show that there is no difference in the payment shown by the principal to the assessee with gross receipts shown by the assessee in its books of accounts. The assessee must also produce the detailed reconciliation between gross receipts as per books of accounts and gross receipt as per Form No. 26AS. Addition on account of Work Contractor Tax - Held that - Argument of the Ld. AR and annual accounts of the assessee gives different picture. As it is not clear that how liabilities are shown in the books of accounts as payable when the AR of the assessee is denying that Works Contract Tax is at all payable by the assessee. Even in the tax audit report also the tax auditor has also shown the VAT liability as outstanding u/s 43B. We set aside the ground No. 5 of the appeal to the file of the AO with the direction to the assessee to produce the complete reconciliation of the Work Contractor Tax payable shown in the books of accounts as well as the VAT returns filed by the assessee

Issues involved:
1. Assessment order under section 144 of the Income Tax Act 1961
2. Service of notice under section 143(2) of the Income Tax Act
3. Addition of gross receipts and works contract taxes
4. Disallowance of various expenditures and purchases

Analysis:

Issue 1: Assessment order under section 144 of the Income Tax Act 1961
The appellant challenged the assessment order passed under section 144 of the Income Tax Act for AY 2009-10. The appellant contended that the order was bad in law and against the facts of the case. The Assessing Officer made additions on account of differences in gross receipts and works contract taxes. The appellant failed to provide necessary details, leading to the Assessing Officer passing the order under section 144. The Tribunal dismissed this ground as the appellant did not cooperate in providing the required information, justifying the Assessing Officer's decision.

Issue 2: Service of notice under section 143(2) of the Income Tax Act
The appellant contested the service of notice under section 143(2) of the Income Tax Act, claiming it was not served within the prescribed time. The Assessing Officer argued that the notice was duly served on the appellant. The Tribunal examined the facts and held that the notice was indeed served on time, as per the records and submissions made by the parties. The Tribunal upheld the decision of the CIT (A) on this ground.

Issue 3: Addition of gross receipts and works contract taxes
The appellant challenged the additions made on account of gross receipts and works contract taxes. Discrepancies were noted between the gross receipts as per the books of accounts and Form No. 26AS. The Tribunal observed that the appellant failed to reconcile these differences adequately. It directed the Assessing Officer to seek confirmed ledger accounts and detailed reconciliations to verify the accuracy of the reported figures. The Tribunal allowed this ground, providing the appellant with an opportunity to rectify the discrepancies.

Issue 4: Disallowance of various expenditures and purchases
The appellant disputed the disallowance of certain expenditures and purchases by the Assessing Officer. The CIT (A) upheld some additions but deleted others after considering the appellant's submissions. The Tribunal directed the Assessing Officer to re-examine the issue based on the additional information provided by the appellant. It allowed this ground partially for statistical purposes, indicating that the appeal was partly successful.

In conclusion, the Tribunal's judgment addressed various issues raised by the appellant regarding the assessment order, notice service, additions of gross receipts and works contract taxes, and disallowance of expenditures and purchases. The Tribunal provided detailed analysis and directions for further verification, partially allowing the appeal for statistical purposes.

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