2019 (2) TMI 1344 - AT - Income Tax

Reversing assessment u/s 263 - addition on account of difference in 26AS statement regarding receipts realized from the assessee s seven payer parties - additions of amount on which TDS has been deducted - HELD THAT - Assessee is engaged in travel agent and tour operation business. The only issue herein is that of re-conciliation of the corresponding statements in from 26AS vis-a-vis assessee s computation of income declared pertaining to the impugned assessment year. The CIT(A) has examined assessee s all seven parties ledgers, details and receipt in issue to come to the conclusion that it had rightly not treated gross sum of its receipts as income as per Form 26AS statement. The assessee mainly derives commission income only from the parties/payers concerned after maintaining ledgers of its customers whose payments are made in advance. As rightly not treated all the receipt amounts as its income as confirmed by the corresponding ledger accounts. We make it clear that these clinching ledger accounts of its parties have gone unrebutted during the course of assessment as well as the instant second appeal proceedings before us. We conclude in these facts that the CIT(A) has rightly deleted the impugned addition made by the Assessing Officer alleging lack of reconciliation between assessee s total receipts vis-a-vis the income component admitted therein in its computation. - Decided against revenue

Summary

Issues Involved:
Revenue's appeal challenging correctness of CIT(A)'s action reversing assessment findings regarding addition in receipts realized from payer parties.

Analysis:
The Revenue's appeal for the assessment year 2011-12 contested the Commissioner of Income Tax (Appeals)-4, Kolkata's decision regarding an addition of ?3,61,15,386 due to differences in 26AS statement receipts from the assessee's seven payer parties. The CIT(A) examined the discrepancies and explanations provided by the assessee, a Travel Agent and Tour Operator, regarding the receipts. The crux of the matter was discrepancies due to time or classification differences. The CIT(A) found that no additions should be made after considering the explanations, directing the Assessing Officer to allow the claim of the appellant.

During the hearing, the departmental representative argued that the Assessing Officer was correct in adding the disputed sum based on the 26AS statement figures. However, upon review, the appellate tribunal found no merit in the Revenue's ground. The assessee had submitted detailed party-wise gross receipts, ledger accounts, and other relevant documents to support their case. The tribunal noted that the assessee, engaged in travel and tour operations, receives commission income from specific parties, and had not treated all receipt amounts as income, as confirmed by ledger accounts. The CIT(A) rightly deleted the addition made by the Assessing Officer, as the reconciliation between the total receipts and income admitted in the computation was justified based on the evidence presented.

In conclusion, the Revenue's appeal was dismissed, affirming the CIT(A)'s decision. The tribunal emphasized the importance of reconciling statements and ledger accounts in determining the income component for assessment purposes.