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2017 (8) TMI 526 - AT - Income TaxValidity of reopening of assessment u/s 147/143(3) - difference in the sales/receipt figures declared in the P&L account and sales as per Form 26 AS - Held that:- The pleadings of the ld AR are not supported by the facts of the case. The discrepancy was noted between the books of account and form 26 AS. On that basis, the additions have been made. Therefore, the contention of the ld AR that no addition was made on the basis on which the reopening based is completely unjustified. No legal discrepancy in initiating the proceedings U/s 148 of the Act by reopening the assessment. In view of these facts, uphold reopening as valid. Addition towards increase in valuation of work in progress of the closing stock - Held that:- The addition made on estimate basis, has been deleted by the ld. CIT(A). Further this addition has been made on specific basis of the fact that the amount of ₹ 17,50,000/- received by the assessee from the three parties was not disclosed as a receipt in the P&L account for the reasons that the work was not completed and no bills were issued. These receipts were not made part of the turnover. But there is no denial to the fact that part work was complete hence it should have been shown as work in progress. In view of this fact, ld. CIT(A) was justified in sustaining the addition of ₹ 5,78,500/- out of the total receipt of ₹ 17,50,000/- not declared in P&L account. These amounts should have been shown by the assessee in the work in progress, which shall form part of the closing stock. The income of the year shall increase by that amount. Therefore, find no infirmity in the order of the ld. CIT(A) and the same is hereby affirmed. Addition towards belated deposit of TDS U/s 40(a)(ia) - Held that:- Section 28 of the Act provide about which income shall be chargeable to income tax under the head profit and gain of business and profession. The provisions of Section 28 of the Act cannot be extended to encompass expenses other than mentioned in Section 30 to 38 of the Act, so that those expenses are not covered by Section 40(a)(ia) of the Act. Therefore, the ld A.R.’s pleadings were completely against the legal provisions of the Act. However, his alternate plea that the person to whom the payment was made has furnished the return of income U/s 139 of the Act and has included the same in their return of income and due taxes have been paid. This aspect needs verification at the level of the Assessing Officer, therefore, restore this issue to the file of the Assessing Officer. Appeal of the assessee is partly allowed for statistical purposes only.
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