2024 (5) TMI 588 - AT - Income Tax

Mismatch in receipts between Profit and Loss Account and Form 26AS - whether the corresponding receipts attributable to TDS claim had been offered to tax by the assessee during the year under consideration? - HELD THAT - As and when payment is realized from the party, it makes respective entries in subsequent year in the books. It was submitted that the payments were received from the clients in the month of April 2014 and accordingly accounted for in the SAP software in AY 2015-16. But since the corresponding TDS is reflected in Form 26AS, the same was claimed by the assessee in the return for AY 2014-15. As submitted that in SAP software, there is no scope for passing any backdated entries by the assessee. It was also submitted that as far as the income offered to tax is concerned, the assessee had only considered the receipts reflected in Form 26AS while filing the return. As explained that domestic sales eligible for tax deduction as per Form 26AS was Rs 22.32 crores against which TDS was done for Rs 1.40 crores. This has been considered in the return of income by the assessee. TDS reconciliation for the same as per Form 26AS and TDS receivable as per books was filed by the assessee. AO however ignored the contentions of the assessee and extrapolated the receipts based on TDS mismatch and arrived at the income and made addition to that extent in the assessment. This action of the ld. AO was upheld by the CIT(A). AR before us drew our attention to the complete reconciliation of party wise receipts together with TDS thereon - assessee had filed additional evidences under Rule 29 of the Income Tax Appellate Tribunal Rules 1963 furnishing further details party wise. These additional evidences, in our considered opinion, are crucial for adjudication of the issue in dispute before us but these details were admittedly not filed before the ld. AO. The same requires factual verification. We deem it fit and appropriate to restore this issue to the file of AO for denovo adjudication in accordance with law and in the light of the additional evidences filed by the assessee before us. With these directions, the ground raised by the assessee is allowed for statistical purposes.

Summary

Issues involved: Determination of addition made on account of mismatch in receipts between Profit and Loss Account and Form 26AS.

Summary:
The appeal before the Appellate Tribunal ITAT Delhi concerned the addition of Rs 1,71,63,460/- made due to a mismatch in receipts between the Profit and Loss Account and Form 26AS for the assessment year 2014-15. The assessee, engaged in the business of advertisement and media services, filed its return of income declaring Nil income under normal provisions and Book Profits of Rs 2,42,55,251/- u/s 115JB of the Income-tax Act, 1961. The Assessing Officer noted a variance in gross receipts between Form 26AS and the return filed by the assessee. The assessee claimed TDS of Rs 17,16,346/- on its receipts based on Form 26AS but not considered in its SAP software. The assessee explained that income is recognized on a provisional basis against unrealized income, and TDS receivable is recognized upon payment or if reflected in Form 26AS. The Assessing Officer extrapolated the receipts based on the TDS mismatch and made an addition of Rs 1,71,63,460/-, which was upheld by the ld. CIT(A).

Upon hearing the submissions and perusing the records, the Appellate Tribunal found that additional crucial evidences were filed by the assessee during the appeal proceedings, which were not presented before the Assessing Officer. Considering the importance of these details for the issue at hand, the Tribunal decided to remand the matter back to the Assessing Officer for fresh adjudication in light of the additional evidence submitted. The Tribunal allowed the assessee's ground for statistical purposes, thereby allowing the appeal.

In conclusion, the appeal was allowed for statistical purposes, and the matter was remanded to the Assessing Officer for denovo adjudication based on the additional evidences provided by the assessee during the appeal proceedings.