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TMI Blog2023 (7) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... led details of TDS and gross receipts. The said gross receipts have been shown by the assessee in profit and loss account, therefore, the assessee s plea which he has taken before us that gross receipts includes sales tax amount is factually incorrect, as in schedule 6, assessee has shown gross receipts TDS and that gross receipts has been shown in profit and loss account. Had there been any component of sales tax, assessee would have qualified it either in the statement of income or in Form 3CD, but nowhere assessee has qualified the same.T he assessee s claim that the difference is on account of sales tax liability is devoid of merit, therefore we uphold the addition made by the AO. Accordingly, ground Nos. 1 to 3 are dismissed. Addition made out of the purview of limited scrutiny - HELD THAT:- One of the reasons for selection of case for scrutiny was higher turnover reported in service tax return compared to ITR, mismatch in sales turnover reported in audit report and ITR mismatch, 26AS and ITR. Thus, the case was mainly selected on ground of mismatch between the figures shown by the assessee in income tax return vis-a-vis other. The AO has made the addition to the tur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oper opportunity of hearing. Decided against assessee. - ITA No.332/PUN/2023 - - - Dated:- 11-5-2023 - SHRI S.S. GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER For the Assessee by : Shri Abhay Avachat, AR For the Revenue by : Shri M.G. Jasnani, DR ORDER PER DR. DIPAK P. RIPOTE, AM: This is an appeal filed by the assessee-Ravindra Arvind Ranade against the order of Commissioner of Income Tax (Appeals) [National Faceless Appeal Centre], Delhi, dated 30.01.2023 for A.Y. 2015-16, emanating from the order u/s. 143(3), dated 20.12.2017 passed by the ITO, Ward-11(2), Pune. The assessee has raised the following grounds of appeal: 1. The learned AO has erred in making addition of Rs. 19,74,561/- to the total income of assessee under pretext of mismatch in the amount of sales turnover as per accounts and the learned CIT(A) in sustaining the same. 2. The learned AO has erred in making addition of Rs. 19,74,561/- alleging that there was a difference in sales/receipts as per accounts, thus, resulting in understatement of income. 3. The revenue authorities did not consider the fact that difference in gross turnover / sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal Receipts of the assessee for the F.Y. 2014-15 (Total of Co. 1 2) Rs. 14,57,114.57/- Rs. 1,80,87,426.60/- Rs. 1,95,44,540/- The assessee has followed the cash system of accounting to book income, therefore, the total receipts of the assessee for the year under consideration should have been Rs. 1,95,44,540/- whereas in Profit Loss a/c for the year total receipts has been reported at Rs. 1,75,69,979/- Thus there is a difference of Rs. 19,74,561/- [Rs. 1,95,44,540/- (-) Rs. 1,75,69,979/-] and not Rs. 13,58,522/- as mentioned in show cause. In this regards no written submission was made by the assessee however it has been contended by the Authorized Representative of the assessee that a is following cash system of accounting for the purpose of Income tax and Mercantile system for the purpose of service tax. He further contended that feeble was again made by him to justify that the difference is on account of different accounting systems. The above contention of the assessee has also been considered. Considering the facts emerged the issue arisen is not as to whether there is difference between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of account are subjected to tax audit. The AO has made the addition of Rs. 19,74,561/- on account of un-reconciled professional receipts/mismatch in receipts as per accounts /ITR. Ld.AR further submitted that the addition is based on reconciliation statement furnished by assessee which compared actual receipts through cash and bank book vis-a-vis amount of sale credited to profit and loss account. The actual receipts as per cash and bank book are Rs. 1,95,44,540/-, while amount of sale credited to profit and loss account is Rs. 1,75,69,979/-. Thus, there is difference of Rs. 19,74,561/-. This difference in turnover was added back by the AO. However, the same is not tenable because both the figures of sale are from same set of books of account and there cannot be any difference in same. The amount of sale credited to profit and loss account of Rs. 1,75,69,979/- is net of service tax i.e. net sales and it does not include service tax liability. While actual receipts of Rs. 1,95,44,540/- are inclusive of service tax liability i.e. gross receipts. Therefore, net figure of sale cannot be compared with gross sale and the difference in them will not lead to mismatch and addition. Ld.AR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nting, the total actual receipts of Rs. 1,95,44,540/- will be the actual turnover of the assessee for F.Y. 2014-15. However, the assessee in the profit and loss account has shown the turnover of Rs. 1,75,69,979/- only. Therefore, the AO has added the difference. Ld.AR pleaded before us that the difference is on account of sales tax liability. Ld.AR claimed that receipts actually deposited in bank account contains sales tax amount which is 12.36%. Ld.AR has merely filed three sample sale invoices, however, these sample invoices do not demonstrate that the actual amount which has been deposited in bank contains sales tax amount also. In Form 3CD column No. 26 is regarding sum referred in s. 43B . Thus, column 26 is regarding sales tax, custom duty, excise duty etc. In column No. 26, assessee has merely returned NIL. It means, in Form 3CD, assessee has not claimed that there is NIL sales tax amount collected by assessee and out of that NIL amount deposited by assessee and outstanding at the end of the year is NIL. If there is any sales tax amount collected/outstanding which could have been shown in Form 3CD (column No. 26), but not such amount appears in column No. 26 of Form 3CD. Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f coercion, threat, undue influence. In this case, the assessee has not alleged that there was any coercion, threat, undue influence. In these facts and circumstances of the case, the ground No. 5 of the assessee is dismissed. Ground No. 6 5.6 The assessee has claimed that only profit element should be taxed, if at all addition is sustained. The assessee in income and expenditure account, had claimed expenditure for AY 2015-16, but shown less turnover, therefore the expenditure pertaining to the said amount of Rs. 19,74,561/- has already been claimed by the assessee in profit and loss account. Therefore, the AO was right in making addition of entire amount of Rs. 19,74,561/-, therefore there is no merit in the assessee s claim that only profit shall be taxed, hence, ground No. 6 of the assessee is dismissed. Ground No. 7 5.7 The assessee has alleged that AO and the ld.CIT(A) has not considered the submissions of the assessee, however, there is no merit in the said ground as both the AO and the ld.CIT(A) had reproduced the assessee s submissions and have arrived at the decision after considering his submissions. Therefore, ground No.7 of the assessee is dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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