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2018 (12) TMI 1459 - AT - Income TaxUnder statement of receipts as per TDS Certificate and the P&L account on account of redrying and threshing charges - Non-reflection of discounts in TDS certificates - evidences for allowing the additional discount - Held that - Due to recession in the tobacco market, the assessee has allowed additional discount to M/s Somasundaram who is bulk customer and the receipts in the TDS certificates were before allowing the additional discount. There is no dispute that the assessee has allowed the additional discount and the recipient M/s Somasundaram has admitted the additional discount in the returns of income and offered for taxation. The office of the Sr. AR has filed a copy of AO s letter dated 16.08.2017 addressed to Sr. AR confirming that M/s Somasundaram, the recipient has admitted the entire discount by means of credit entry in redrying and threshing charges in their books. AO has confirmed that the assessee has allowed the discount and the recipient had admitted the additional discount in the hands of the recipient, there is no case for making the addition again in the hands of the assessee and accordingly we uphold the order of the CIT(A) and dismiss the appeal of the revenue.
Issues:
Understatement of receipts as per TDS certificate and P&L account due to redrying and threshing charges. Analysis: The appeal was filed by the revenue against the order of the Commissioner of Income Tax (Appeals) regarding the under statement of receipts as per TDS Certificate and the P&L account concerning redrying and threshing charges for the Assessment Year 2010-11. The Assessing Officer (AO) reopened the assessment due to a discrepancy in redrying and threshing charges paid as per TDS certificates and the receipts offered in the P&L account. The AO found a difference of ?1,07,32,284 between the receipts as per TDS Certificate and the income admitted by the assessee in the P&L account. The AO added this difference to the total income of the assessee. The assessee explained that the difference arose due to discounts offered to a specific customer for procuring business. The AO treated the difference as an understatement of receipts due to the failure of the assessee to provide evidence for the additional discount, resulting in an addition to the total income. Upon appeal, the CIT(A) observed that the assessee had reconciled the receipts admitted in the Profit & Loss account and the TDS receipts, finding no difference. The CIT(A) noted that the additional discount given to the customer for procuring job work was not reflected in the TDS certificates, leading to the disparity in receipts. The CIT(A) also confirmed that the customer had admitted the additional discount received and paid taxes on it. The CIT(A) allowed the appeal of the assessee based on these findings. The tribunal heard both parties and reviewed the case. It was established that the assessee had indeed allowed the additional discount to the customer, who had admitted it in their returns and paid taxes on it. The AO confirmed that the recipient had acknowledged the entire discount. Consequently, the tribunal upheld the CIT(A) order and dismissed the revenue's appeal. The cross objections filed by the assessee supporting the CIT(A) order were allowed due to the dismissal of the revenue's appeal. In conclusion, the appeal of the revenue was dismissed, and the cross objection of the assessee was allowed, based on the reconciliation of receipts, acknowledgment of discounts, and tax payments by the recipient customer.
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