2014 (1) TMI 1308 - AT - Income Tax

Deletion made on account of difference in receipts Variation in value as per TDS certificates and receipts and receipts shown in P&L account Held that - It depends upon the factual finding as to what is the correct amount of receipt of the assessee - the assessee s customer M/s Protonics Systems India Pvt. Ltd. has raised a debit note and has also given a confirmation letter of the turnover, along with particulars of its PAN No. Income-tax assessment details etc. - The AO has not conducted any verification or inquiry, on these documents - There is no finding that these evidences are false or incorrect - the discrepancy was a bonafide error which is not attributable to the assessee Decided against Revenue. Reasoning of the AO ignored - Held that - The assessee has produced documents to demonstrate that it had wrongful taken input credit for the earlier periods - This fact was pointed out by the audit party - On coming to know of this wrong credit, the assessee made the payment during the current financial year the order of the CIT (A) upheld that the actual payment of Excise Duty is allowable during the year Decided against Revenue.

Issues involved:
- Appeal against the order of ld. CIT (A) for A.Y. 2008-09
- Addition of Rs.34,00,205/- on account of difference in receipts
- Addition of Rs.5,86,000/- on account of Excise Duty
- Verification of debit note genuineness
- Claim of Modvat credit for Excise Duty
- Assessment of correct turnover amount

Analysis:
1. Addition of Rs.34,00,205/- on account of difference in receipts:
The revenue appealed against the deletion of this addition by the CIT (A). The revenue contended that the debit note in question was doubted for its genuineness by the AO, labeling it as a self-serving document. However, the assessee's counsel argued that the debit note was raised by a customer who was not a connected party, emphasizing that the AO did not verify the claim before rejecting it. The Tribunal upheld the CIT (A)'s findings, noting that the customer provided a confirmation letter and other details, and there was no evidence to suggest the documents were false. The Tribunal dismissed the revenue's appeal on this ground.

2. Addition of Rs.5,86,000/- on account of Excise Duty:
Regarding the addition of Excise Duty, the assessee demonstrated that it had wrongfully claimed Modvat credit for previous periods, which was identified by the audit party. Upon discovering this error, the assessee made the payment during the relevant financial year. The Tribunal upheld the CIT (A)'s decision that the actual payment of Excise Duty during the year was allowable. The Tribunal emphasized that the method of accounting did not impact the allowability of the payment, ultimately dismissing the revenue's appeal on this ground.

3. Verification of debit note genuineness:
The Tribunal highlighted that the AO did not conduct any verification or inquiry into the documents provided by the customer, which included a confirmation letter and PAN details. As there was no evidence to suggest the documents were false, the Tribunal upheld the CIT (A)'s findings that the discrepancy in receipts was a genuine error not attributable to the assessee. Consequently, the Tribunal dismissed the revenue's appeal on this issue.

4. Claim of Modvat credit for Excise Duty:
The Tribunal acknowledged the assessee's wrongful claim of Modvat credit for previous periods, as pointed out by the audit party. However, upon rectifying this error and making the payment during the relevant year, the Tribunal agreed with the CIT (A) that the actual payment of Excise Duty was allowable. The Tribunal clarified that the accounting method used did not impact the allowability of the payment, leading to the dismissal of the revenue's appeal on this matter.

5. Assessment of correct turnover amount:
The Tribunal concluded that the CIT (A)'s factual findings regarding the correct turnover amount were valid, as supported by the customer's documentation. The Tribunal noted that the revenue did not challenge these findings, leading to the affirmation of the CIT (A)'s decision that the discrepancy was a genuine error not attributed to the assessee. Consequently, the Tribunal dismissed the revenue's appeal, upholding the CIT (A)'s assessment of the turnover amount.

In conclusion, the Tribunal dismissed the revenue's appeal against the CIT (A)'s order for the A.Y. 2008-09, affirming the decisions related to the additions of Rs.34,00,205/- and Rs.5,86,000/-, the genuineness of the debit note, the Modvat credit claim for Excise Duty, and the assessment of the correct turnover amount.

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