2018 (8) TMI 1715 - AT - Income Tax

Addition on account of difference in the total receipts shown in the Form No. 26AS as against the receipts shown in the books of account - eligibility of deduction U/s 80P(2) - Held that - The assessee has brought on record the material to show that the correct figure of receipts as per the amended Form No. 26AS is 19, 14, 066/- as against 41, 62, 389/- out of which the amount of 5, 18, 392/- was already declared by the assessee and not in dispute and hence the difference comes to about 14 lacs. As we have already noted that the amount at about 15 lacs was received by the assessee from the receivables as on 31/3/2008 and the balance of receivables shown as on 31/3/2009 is 13, 15, 501/-. Hence the Assessing Officer is directed to consider the amended Form No. 26AS as well as these balances shown by the assessee as on 31/3/2008 as well as on 31/3/2009 on account of commission receivables and then to compute the difference if any to be added in the income of the assessee. Even if any addition to be made on account of difference between the receipts shown in the books and the receipts shown in the Form No. 26AS the said amount would be eligible for deduction U/s 80P of the Act in view of the decision of this Tribunal in assessee s own case for the A.Y. 2005-06. Accordingly we set aside the orders of the authorities below and remit the matter back to the record of the Assessing Officer for limited purpose of computing the differences if any after reconciliation of the balances. Appeal of the assessee is partly allowed

Summary

Issues Involved:
1. Ex parte decision by CIT(A) refusing adjournment sought by assessee.
2. Addition of differential amount in receipts as per Form 26AS and return of income.
3. Eligibility for deduction under Section 80P(2) of the Income Tax Act, 1961.

Issue 1: Ex parte decision by CIT(A)
The assessee appealed against the CIT(A)'s decision to decide the appeal ex parte by refusing the adjournment sought by the assessee's authorized representative (A/R). The A/R had requested time to reconcile differences in receipts, but the adjournment was denied.

Issue 2: Addition of differential amount in receipts
The Assessing Officer noted a difference in receipts shown in the books of account and Form 26AS. The assessee explained that the amount in Form 26AS was already accounted for in the previous year's income. The CIT(A) confirmed the addition of the differential amount. However, the Tribunal found that an amended Form 26AS corrected the error, reducing the differential amount. The Tribunal directed the Assessing Officer to consider the amended Form 26AS and balance of commission receivables to compute any difference to be added to the income.

Issue 3: Eligibility for deduction under Section 80P(2)
The Tribunal referred to a previous case involving deduction under Section 80P(2) for a cooperative society. It was held that income attributable to certain activities of a cooperative society could be exempt from tax. Applying this precedent, the Tribunal determined that even if an addition was made, it would be eligible for deduction under Section 80P of the Act. The matter was remitted back to the Assessing Officer for computing any differences after reconciliation of balances.

In conclusion, the appeal by the assessee was partly allowed, with the Tribunal setting aside the decisions of the authorities below and remitting the matter back to the Assessing Officer for further computation based on the corrected Form 26AS and balance of commission receivables.