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TMI Blog2018 (9) TMI 1160X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 37BA(3) without appreciating the mercantile system of accounting as per section required to be credited on accrual basis. 3. That on the facts and circumstances of the case, the CIT(A) has erred in allowing relief to the assessee ignoring the fact that TDS of Rs. 4,94,685/- was claimed in the return of income while the income on such TDS was not credited in the I/E accounts as required in accordance to provisions of Rule 37BA(3). 4. That on the facts and circumstances of the case, the CIT(A) has erred in allowing relief on provision made on accrual basis for future expense to be applied by the chapters ignoring the fact that provision cannot be treated as application of money 5. That on the facts and circumstances of the case the CIT(A) has erred in granting relief on account of depreciation claimed without appreciating the fact that the cost of acquisition earlier years thereby reducing written down value to nil. 6. That the assessee craves for leave to add, delete or modify any of the grounds of appeal before or at the time of hearing." 3. Ground No.1, 2 and 3 raised by the Revenue relate to addition of Rs. 1,93,02,985/- made on account of difference in credit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... try pursue and conduct various programmes, etc., and in the year end send their activity report and accounts to the head office for consolidation. We note that issue before us is related to the TDS Annual Statement in the Form 26AS and the reconciliation thereof with the TDS and the income accounted for in the assessee's accounts. Obviously, as the assessee has to get the accounts of the respective Chapters located across the Country, and thereafter to consolidate, thus, there is bound to be some differences, because of timing of recognition of receipts/income. 7. We note that the in Form 26AS, there are 721 number of entries running into 39 number of pages. In the assessee`s case under consideration, the TDS are mostly u/s 194A [Interest other than 'interest on securities'] and, u/s 194C [payments to contractors]. We note that the difference arises because of timing of the transactions, which is the common issue in TDS matters. The relevant comparative facts and figures are given below: As per form 26AS As per assessee Difference Income 3,17,86,998/- 2,62,77,323/- 55,09,675/- TDS 7,40,203/- 6,72,449/- 67,754/- As we explained that Form 26AS is only the statement of the tax d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in recognition of revenue with corresponding TDS, will get adjusted in future years and hence there is no tax evasion on the part of the assessee. Moreover, the details of the impugned addition at Rs. 1,93,02,985/- made by the AO is not available, that is, on what basis he worked out the addition at Rs. 1,93,02,985/-, therefore, we do not agree with the addition made by assessing officer. Apart from this, we rely of the judgment of the coordinate Bench on the same issue in the case of B.S. Consultancy Services Vs. ITO, ITA no.345/Kol/2017 order dated 06.09.2017, wherein it was held as follows: "4. We have heard rival submissions and gone through the facts and circumstances of the case. Before us the main plea of the assessee is that the receipt in the return is shown after netting of service tax and, therefore, the difference in receipt shown in Form 26AS vis-à-vis that shown in the return cannot justify the addition made by the AO. According to the Ld. AR, based on the AIR information addition cannot be made. According to the ld. AR, the assessee has no control over Form 26AS which is generated by the department after the payer makes the payment in the name of assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee debited a major port of such expenses to the Chapters but such expenses were not finally adjusted with total amount of claim in the books of head office. The assessing officer noted that it was apparent from the statement of the assessee that the assessee could not defend its own accounts. Hence, provision being not an actual application, the entire provision of Rs. 23,71,990/-was disallowed. 11. On appeal, the ld CIT(A) deleted the addition. Aggrieved by the order of ld CIT(A), the Revenue is in appeal before us. Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. On the other hand, ld Counsel for the assessee relied on the order passed by the ld CIT(A). 12. We have given a careful consideration to the rival submissions and perused the material available on record, we note that this ground of appeal is in respect of disallowance of Rs. 23,71,990/- claimed by the assessee as provisions for entitlement. The said amount represents entitlements due to respective chapters computed on the basis of collections from membership subscription un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rules of accountancy. There is no discussion on this issue in the impugned assessment order; but has been directly done by the assessing officer in the computation of income part. 15. On appeal, ld CIT (A) held that depreciation should be allowed on the fixed assets owned by the trust. Aggrieved by the order of ld CIT(A), the Revenue is in appeal before us. Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. On the other hand, ld Counsel for the assessee relied on the order passed by the ld CIT(A). 16. We have given a careful consideration to the rival submissions and perused the material available on record, we note that the assessee is entitled to the claim for depreciation on the assets owned by it. If depreciation is not allowed as a necessary deduction in computing the income of the assessee, then there would be no way to preserve the corpus of the trust. Reliance is placed on CIT vs. Shri Gujrati Samaj (Regd.) (2011) 64 DTR 76 (MP). We are of the view that the depreciation needs to be allowed. This is a primary accepted principle of accou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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