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2022 (11) TMI 576 - AT - Income TaxUnexplained turnover - Difference between sales as per profit and loss account and gross services as per service tax return to the income of the assessee - HELD THAT:- Turnover in service tax return is on account of receipt of money during the year. Therefore, it is apparent that manner of recording turnover for service tax is different than the amount of Turnover shown in the profit and loss account. Though, the difference arising between these two sums is required to be explained by the assessee, [1] with respect to advances [2] grossed up of the services, [ services received during the year, but turnover shown in last year etc. The difference between gross receipt shown by the assessee in service tax return and in the books of accounts may be the first trigger point of investigation and reconciliation, but unless there is difference which shows that there is lower income offered by the assessee in its tax return, the addition cannot be made. We direct the assessee to submit the party wise reconciliation of income offered in the profit and loss account with the amount of gross receipts on which service tax is collected and reconcile the difference between the two. If the advances are received during the year, assessee should also demonstrate that these sums are disclosed in advance received from the customers. Therefore, it is the duty of the assessee to provide reconciliation between the two sums. In view of this, we set aside the whole issue back to the file of the learned AO with a direction to the assessee to submit the reconciliation with proper evidence. Appeal of the assessee is allowed for the statistical purposes.
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