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2023 (3) TMI 390 - AT - Income Tax


Issues:
1. Addition of Rs.1,23,42,928/- for difference between Form 26AS and P&L A/c.
2. Addition of Rs.7,74,970/- on account of unexplained cash deposit.

Analysis:

Issue 1: Addition of Rs.1,23,42,928/- for difference between Form 26AS and P&L A/c:
The Assessing Officer noted a discrepancy in the credits appearing in Form 26AS and the P&L A/c of the assessee company. The difference of Rs.1,87,71,423/- was attributed to the accounting policy adopted by the Auditors, specifically related to discounts allowed by customers. The Assessing Officer made the addition as the assessee failed to reconcile the difference adequately. The learned CIT (A) upheld this addition, stating that the assessee's explanations were insufficient. The Tribunal observed that although the assessee submitted a full reconciliation before the CIT (A), it was not properly considered. The Tribunal directed the issue to be restored to the Assessing Officer for further substantiation by the assessee to reconcile the difference between the P&L A/c and Form 26AS.

Issue 2: Addition of Rs.7,74,970/- on account of unexplained cash deposit:
The Assessing Officer noted cash deposits of Rs.7,74,790/- in the bank account of the assessee, for which the source was not adequately explained by the assessee. The learned CIT (A) sustained this addition, as the assessee failed to reconcile the cash deposits. However, the Tribunal disagreed with this decision, noting that the assessee provided detailed invoice-wise information on cash receipts, totaling to Rs.7,74,970/-, which were part of the total sales. The Tribunal concluded that the addition was unjustified and directed the Assessing Officer to delete the addition.

In conclusion, the Tribunal allowed the appeal filed by the assessee for statistical purposes, directing the Assessing Officer to reevaluate both the issues mentioned above.

 

 

 

 

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