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2020 (7) TMI 540 - AT - Income TaxAddition being the difference in the opening balance of the claim of advance received - HELD THAT - Although the CIT(A) called for a remand report from the AO while deciding the issue, the AO has not asked anything about this difference nor the CIT(A) has given any opportunity to the assessee to explain the same - we deem it proper to restore this issue to the file of the AO with a direction to give an opportunity to the assessee to substantiate the difference in the opening balance in the books of the assessee as well as M/s Gulab Farms Pvt. Ltd., and decide the issue as per fact and law. Ground No.1 by the assessee is accordingly allowed for statistical purposes. Addition of consultancy charge to the assessee for the year under consideration - CIT(A) while deleting the above addition has directed the AO to sustain the addition being the difference in the balance as per ledger account of assessee and M/s V.C. Solutions which is in the nature of unexplained credit - submission of the ld. Counsel that the difference is due to the grossing up of amount of TDS by M/s VC Solutions and the assessee has shown the net amount excluding the TDS and there was wrong credit in the name of Ms Chandni - HELD THAT - Although the ld.CIT(A) has called for a remand report from the AO, this issue was not properly explained by the assessee during the remand proceedings to the AO nor the CIT(A) has considered the same properly in the light of the arguments advanced by the ld. Counsel - we deem it proper to restore the issue to the file of the AO with a direction to grant an opportunity to the assessee to substantiate its case - Decided in favour of assessee for statistical purposes.
Issues Involved:
1. Addition of ?20,90,000/- as unexplained credit in the account of M/s. Gulab Farms Pvt. Ltd. 2. Addition of ?5,21,935/- as unexplained credit in the account of M/s. V.C. Solutions (P) Ltd. Detailed Analysis: 1. Addition of ?20,90,000/- as Unexplained Credit in the Account of M/s. Gulab Farms Pvt. Ltd.: The assessee, an individual proprietor of M/s Reproduction, filed a return declaring an income of ?79,27,180/-. The AO determined the total income at ?1,64,03,400/- after making various additions. One of the additions was ?38,63,250/- based on bills accounted by M/s. Gulab Farms Pvt. Ltd. on 31.03.2010, which the AO treated as income of the assessee for the year. The CIT(A) deleted this addition but directed the AO to add ?20,90,000/- due to a difference in the opening balance between the assessee's and Gulab Farms' books. The Tribunal found that the CIT(A) did not provide the assessee an opportunity to explain the difference in the opening balance. The assessee argued that the difference was due to a cheque issued on 31.03.2010 and recorded in the next financial year. The Tribunal restored the issue to the AO for verification, allowing the assessee to substantiate the difference in the opening balance. 2. Addition of ?5,21,935/- as Unexplained Credit in the Account of M/s. V.C. Solutions (P) Ltd.: The AO added ?22 lakhs paid by M/s V.C. Solutions as consultancy charges, which was not shown as income by the assessee. The CIT(A) deleted this addition but sustained ?5,21,935/- as unexplained credit due to a difference in the balances shown in the ledger accounts of the assessee and V.C. Solutions. The assessee contended that the difference was due to the grossing up of TDS amounts and a wrong credit entry in the name of M/s Chandni. The Tribunal noted that the CIT(A) did not properly consider the explanation provided by the assessee regarding the grossing up of TDS and the erroneous credit entry. The Tribunal restored the issue to the AO for fresh verification and adjudication, allowing the assessee to substantiate its claims. Conclusion: The appeal filed by the assessee was partly allowed for statistical purposes. The Tribunal restored both issues to the AO for further verification and adjudication, ensuring that the assessee is given an opportunity to explain the discrepancies and substantiate the claims with proper evidence. The order was pronounced in the open court on 21.07.2019.
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