Service Tax paid through Banking Channel cannot be deemed as Unexplained

Full Text of the ITAT Order is as follows:-

These cross appeals are directed against the order of CIT(A)-1, Jabalpur dated 30/06/2014 relating to assessment year 2009-10 arising out of the order u/s 148/144 of the I.T. Act dated 31/12/2013.

2. Assessee’s appeal no. 137/Jab/2014 is a recalled matter for the limited purpose of adjudicating the ground No. 3 which remained unadjudicated by the Tribunal. This appeal was recalled by M.A. No. 27/Jab/2016 dated 23/01/2017.

3. Briefly stated, the facts of the case, are that the assessee is a retired Lt. Colonel. Under settlement scheme framed by the Government of India, the assessee received certain security contract from the Government body. For the year under appeal the assessee was engaged in the activity of supplying security personnel to BHEL, BPCL, AIR and IOC and this activity was carried out under the sole proprietorship concern Militia Security Net. Return of income was filed on 07/12/2009 declaring income of Rs. 3,31,990/-. Notice u/s 148 of the Act was issued. Necessary reply was filed. The Assessing Officer observed that the receipts shown in the return were less by Rs. 76,94,926/- as against the receipts shown in Form No. 26AS available on the income tax website. This alleged difference of Rs. 76,94,926/- comprised of two amounts; (i) Rs. 24,89,710/- being the receipt from BHEL which the assessee has claimed to have included in the gross receipts of subsequent years and (2) receipt of Rs. 51,33,559/- from BPCL, AIR and IOC which the assessee has not claimed to have received but was received by a person Shri Madhup Singh who had fraudulently opened bank account in Patna and carried the business in the name of assessee. The Assessing Officer was not satisfied with the reply given during the assessment proceedings and made the addition of Rs. 76,94,926/-. Addition was also made towards unexplained expenditure u/s 69C for payment of service tax of Rs. 4,33,505/-.