Case Law Details
Dineshbhai Muljibhai Patel Vs DCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that addition towards undisclosed receipts not sustainable since the amount stand reconciled. Accordingly, order set aside and appeal filed by the assessee allowed.
Facts- The assessee is engaged in the business of electrical work, installation and consultancy in the name of Amal Electricals. The assessment order made by the Assessing Officer u/s.143(3) of the Income Tax Act, 1961 on a total income of Rs.30,95,350/- and addition of Rs.3,19,308/- made on account of undisclosed receipt and Rs.14,250/- on account of undisclosed interest income toalling to Rs.3,33,558/-. Penalty proceedings u/s.271(1)(c) of the Act are also initiated separately for concealment of income of Rs.3,33,558/-.
Conclusion- The addition has been based solely on the different amount which was mentioned in 26-AS and the reconciliation filed by the assessee. We have gone through the details thereof. The TDS deducted under Section 194C of the Act has reflected in Form 26-AS was of Rs.17,65,740/-, whereas in the books of accounts, the assessee has booked the bill for labour service of Rs.14,46,432/- which led to difference of Rs.3,19,308/- which has been considered as unaccounted amount received by the assessee. We find that the difference is attributable to labour bill of Rs.3,85,210/- dated 17/02/2014 which was booked in the books in the Financial Year (FY)2013- 14 and accounted by the customer in FY 2014-15.
Held that since the amounts stand reconciled, we hold that no addition can be made in the hands of the assessee. Thus, the order of the CIT(A) is hereby set aside and allow the grounds of appeal raised by the assessee.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This is an appeal filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals) [CITA] , National Faceless Appeal Centre, Delhi in proceeding u/s.250 of the Income Tax Act, 1961 vide order dated 05/02/2024 passed for the Assessment Year (AY) 2015-16.
2. The grounds of appeal taken by the assessee are as under:-
1. The Ld. CIT(A) has erred in law and on facts of the case in confirming the addition of Rs. 3,19,308/- as undisclosed receipts for the year under
2. Both the lower authorities have erred in making addition solely based on amounts appearing in Form 26AS without understanding the accounting treatment in the books of appellant and its customer and without making any independent verification by issuing notice u/s. 131/133(6) to the
3.. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. The action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed.
4. The Ld. CIT(A) has erred in law and on facts of the case in confirming action of the Ld. AO in levying interest u/s. 234A/B/C/D of the Act.
5. The Ld. CIT(A) has erred in law and on facts of the case in confirming action of the Ld. AO in initiating penalty proceedings u/s. 271(1)(c) of the
6. The Appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.
3. The brief facts of the case are that the assessee has filed his return of income on 26/09/2015 through electronic media declaring total income of Rs.27,61,790/-. The assessee is engaged in the business of electrical work, installation and consultancy in the name of Amal Electricals. The assessment order made by the Assessing Officer u/s.143(3) of the Income Tax Act, 1961 (“the Act”) on a total income of Rs.30,95,350/- and addition of Rs.3,19,308/- made on account of undisclosed receipt and Rs.14,250/- on account of undisclosed interest income toalling to Rs.3,33,558/-. Penalty proceedings u/s.271(1)(c) of the Act are also initiated separately for concealment of income of Rs.3,33,558/-.
4. We have heard both the parties and perused the material available on record. We find that the addition has been based solely on the different amount which was mentioned in 26-AS and the reconciliation filed by the assessee. We have gone through the details thereof. The TDS deducted under Section 194C of the Act has reflected in Form 26-AS was of Rs.17,65,740/-, whereas in the books of accounts, the assessee has booked the bill for labour service of Rs.14,46,432/- which led to difference of Rs.3,19,308/- which has been considered as unaccounted amount received by the assessee. We find that the difference is attributable to labour bill of Rs.3,85,210/- dated 17/02/2014 which was booked in the books in the Financial Year (FY)2013- 14 and accounted by the customer in FY 2014-15.
4.1. We have further gone through page Nos. 67 and 70 of the paper book submitted by the assessee, where the amounts have been duly reconciled. For the sake of ready reference, the cumulative summary of Sales and Service Bills raised on Wellcare Hospital is reproduced hereunder:
4.2. Since the amounts stand reconciled, we hold that no addition can be made in the hands of the assessee. Thus, the order of the CIT(A) is hereby set aside and allow the grounds of appeal raised by the assessee.
5. In the result, the appeal of the assessee is allowed.
Order pronounced in the Court on 22nd November, 2024 at Ahmedabad.
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