2021 (3) TMI 723 - AT - Income Tax

Reopening of assessment - mismatch of income as shown by the assessee in the return of income filed with the Department , and income from contractual receipts as is reflected in Form No. 26AS - HELD THAT - There could be a bonafide belief in including income in a particular year say in the instant case , the assessee has claimed that income was received in preceding previous year viz. 2013-14 and the assessee included the same as income for that year and paid taxes, but the Alstom T D included the said amount in TDS returns for current year under consideration . Now, it is for revenue to bring on record cogent material to prove that prejudice is caused to Revenue or there is malice on part of assessee to have included said income in preceding previous year while it ought to have been included in the current previous year income. However at the same time we are of the considered view that this contention of the assessee that the said amount is duly included in the return of income filed for preceding previous year and due taxes paid for previous year 2013-14 requires verification. We are restoring this issue to the file of the AO for fresh adjudication and the assessee is directed to provide all necessary evidences to prove that income of ₹ 18,46,865/- reflected by Alstom T D in TDS return filed for current year is the same amount which was paid by Alstom T D to assessee in preceding year and the same income was duly included by assessee in return of income filed with the department for ay 2014-15 and dues taxes paid to Revenue . Expenses reimbursement - Again, the onus is on the assessee to prove that these are merely expenses reimbursements received from Alstom T D/Areva T D. Thus, this contention of the assessee that the said amounts are merely reimbursements of expenses requires verification . We are restoring this issue to the file of the AO for fresh adjudication and the assessee is directed to provide all necessary evidences to prove that payment as is reflected by Alstom T D in TDS return filed for current year are the expenses reimbursements and the same were included by assessee in return of income filed with the department for ay 2015-16 and dues taxes paid to Revenue. Remaining amount uploaded by Alstom T D in its TDS return for current year as income of the assessee, but the assessee has denied that the assessee did not have any such dealings with Alstom T D and no such income was earned by assessee but rather it was erroneously uploaded by said company Alstom T D in TDS returns filed for current year. The assessee has also produced copies of emails which are placed in paper book to reflect that the assessee has requested Alstom T D to correct this error. The said emails are placed in paper book filed by assessee with tribunal - The assessee has claimed that the said concern is not responding to the assessee s request to correct TDS returns to remove said amount as to the credit of the assessee and to credit to the correct payee , mainly due to change in their management as new management has taken over. It is equally true that the assessee has dealing with said concern Alstom T D/Areva T D and primary onus is on the assessee to prove that the income as is reflected in Form No. 26AS to its credit does not belong to it. Keeping in view entire factual matrix under consideration, we are restoring this issue to the file of the AO for fresh adjudication and the assessee is directed to provide all necessary evidences to prove that payment.

Issues Involved:
1. Addition of ?20,73,875/- already subjected to tax in earlier year.
2. Addition of ?4,33,200/- already subjected to tax in the same year.
3. Addition of ?12,85,663/- appearing in Form 26AS but not received by the appellant.

Issue-wise Detailed Analysis:

1. Addition of ?20,73,875/- already subjected to tax in earlier year:
The assessee, engaged in civil construction, reported total contractual receipts of ?10,52,19,266/- for the assessment year 2015-16. The primary issue was a mismatch between the income declared in the books and the income reflected in Form 26AS. The Assessing Officer (AO) noted a discrepancy of ?38,93,737.36 in contractual receipts from Alstom T&D, with the assessee reporting ?1,20,11,525.63 while Form 26AS showed ?1,58,04,262.99. The assessee claimed that ?12,85,663/- was not received and ?26,08,074.36 was received in the previous financial year 2013-14. The AO added the discrepancy to the income due to lack of substantiation by the assessee.

On appeal, the Commissioner of Income Tax (Appeals) [CIT(A)] reduced the discrepancy to ?37,92,738/- but upheld the addition, rejecting the assessee's claim that the amount was taxed in the previous year. The Tribunal found merit in the assessee's claim that ?18,46,865/- (?11,45,102 + ?7,01,763) was received and taxed in the previous year, and restored the issue to the AO for verification, directing the assessee to provide evidence that the amount was included in the previous year's income and taxes were paid.

2. Addition of ?4,33,200/- already subjected to tax in the same year:
The assessee contended that ?4,33,200/- and ?2,27,010/- reflected in the reconciliation statement were reimbursements for expenses, which were partly credited by Alstom T&D in the previous year but uploaded in the current year's TDS returns. The Tribunal directed the AO to verify the assessee's claim that these amounts were merely reimbursements and included in the income for the current year, restoring the issue for fresh adjudication.

3. Addition of ?12,85,663/- appearing in Form 26AS but not received by the appellant:
The assessee denied receiving ?12,85,663/- from Alstom T&D, claiming it was erroneously uploaded in the TDS returns. The assessee provided email correspondence requesting Alstom T&D to correct the error but received no response due to management changes. The Tribunal restored this issue to the AO, directing the AO to use Section 133(6) of the Income-tax Act to obtain information directly from Alstom T&D and verify the assessee's claim that the amount did not belong to it.

Conclusion:
The Tribunal restored the issues to the AO for fresh adjudication, directing the AO to provide the assessee with an opportunity to present evidence and to verify the claims regarding the discrepancies in income. The appeal was allowed for statistical purposes, with the AO instructed to ensure proper and adequate hearing and to admit the evidence provided by the assessee.

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