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TMI Blog2021 (10) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... idual, who is engaged in the business of execution of contract jobs. The return of income for the year under consideration was filed by him on 29. 09. 2015 declaring total income of Rs. 41,55,420/-. The said return was selected for limited scrutiny under CASS to examine the issue relating to the mismatch in the figures of sales turnover, contract receipts and tax credit. During the course of assessment proceedings, it was brought to the notice of the assessee by the Assessing Officer that the turnover declared by him in the Service Tax Returns for the year under consideration was Rs. 7, 17,79,295/- as against the turnover of Rs. 6, 38,06, 619/- declared in the Income Tax Return. The assessee, therefore, was called upon to explain the differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inging to tax only the profit element of the undisclosed turnover in the hands of the assessee without bringing on record any evidence to show that there was any unaccounted expenses that were actually incurred by the assessee in connection with the undisclosed turnover. He held that the addition of only net profit @ 8% of the undisclosed turnover made by the Assessing Officer thus had rendered the assessment order made by him under section 143(3) erroneous as well as prejudicial to the interest of the revenue and accordingly a notice under section 263 was issued by him requiring the assessee to show- cause as to why the said assessment should not be revised under section 263 of the Act. In reply, reliance was placed by the assessee on vari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. Counsel for the assessee, at the outset, invited our attention to the copy of notice issued by the Assessing Officer under section 143(2) of the Act placed at page no. 1 & 2 of the paper book, whereby the assessee was called upon by the Assessing Officer to explain the mismatch in the turnover/ contract receipts. He also invited our attention to the reply filed by the assessee in response to the said notice placed at page no. 3 & 4 of the paper book to show that the turnover shown by the Consultant of the assessee in the Service Tax Return was wrong and the same was duly explained by the assessee with reference to the details of contract works done and total deposits reflected in the Bank during the year under consideration. He contend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntire amount of undisclosed turnover/ receipts. He also relied on the various judicial pronouncements and contended that when the possible view of the matter is taken by the Assessing Officer, the ld. Principal CIT cannot substitute his own view with the possible view taken by the Assessing Officer under section 263 of the Act. 5. The ld. D.R., on the other hand, strongly supported the impugned order passed by the ld. Principal CIT under section 263 of the Act. He contended that no enquiry whatsoever was made by the Assessing Officer during the course of assessment proceedings to ascertain whether any unaccounted purchase/expenses were actually made by the assessee in relation to the undisclosed turnover/ receipts before allowing deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultant other than the consultant engaged for the work of accounts and Income Tax and other related works. Due to my old age and suffering from different disease such as hyper tension, urinary problem, nervous system problem, thyroid, high pressure, spinal cord injury, I could not check all the related papers of Service Tax/Returns. In addition for last four years, due to my physical inability, I used to execute all contract/ labour supply works done and supervised by my nephew and only son. Due to shivering hands for my nerves system problem, I cannot even sign my name for last few months. All the contract jobs have been executed under W.B. Govt. Organisation named by West Bengal Power Development Corporation Ltd. at its (a) Kolaghat Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration. The case thus was made out by the assessee to show that there was no undisclosed turnover/ receipts as alleged by the Assessing Officer on the basis of wrong figures shown in the Service Tax Returns and the turnover as declared in the income tax return was correct. The Assessing Officer, however, did not accept the case of the assessee and considering all the facts of the case including the fact that the assessee was a Government Contractor and the entire turnover/ receipts were liable to deduction of tax at source, he added the profit element embedded in the undisclosed turnover/ receipts calculated @ 8% to the total income of the assessee. As rightly contended by the ld. Counsel for the assessee by relying on the various jud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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