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2021 (6) TMI 509 - AT - Income TaxDifference between the contractual amount shown in the TDS certificates and that shown in the Profit and Loss account - Credit of entire amount of TDS shown in TDS certificates - assessee has not offered the entire amount of contract receipts shown in the TDS certificates - HELD THAT:- We have noticed that the aggregate amount of payment received by the assessee during the year under consideration was ₹ 2,78,72,229/-, while the amount actually reconciled in a summary manner was ₹ 2,23,30,487/-. In any case, in our view, the reconciliation made in summary manner will not give correct result. It is the duty of the assessee to reconcile the payments received from each of the parties, i.e., the assessee should furnish reconciliation statement for each of the parties. In fact, the assessee itself has reconciled the payments received from M/s Iconica Constructions in a proper manner. In our view, the assessee should reconcile the payments received from other four parties also in the similar fashion. In the reconciliation statement furnished by the assessee in summary manner, the assessee has claimed that there is increase in “work-in-progress” amount to the tune of ₹ 2,66,01,891/- and it is further stated that the above said WIP has been offered as income by the assessee. We are unable to agree with the said submission. The amount of “work in progress” cannot be considered as an item of income offered by the assessee. We explain the same. The amount of “Closing stock”/work in progress” is credited to the Profit and Loss account under “revenue cost matching principle”, i.e., in order to arrive at the correct profit, one is entitled to deduct only corresponding cost. In the normal practice, the purchases made during the year would be booked in the Purchases account and the entire amount shall be transferred to the Profit and Loss account. We are of the view that the issues contested before us require fresh examination. Accordingly, we set aside the order passed by Ld CIT(A) and restore all the issues to the file of the assessing officer for examining them in the light of discussions made supra. As directed earlier, the assessee shall furnish reconciliation statements for each of the parties in the similar fashion as furnished in the case of M/s Iconica Constructions along with the relevant ledger copies. After examining the reconciliation statements and duly considering any other information and explanations that may be furnished by the assessee, the AO may take appropriate decision in accordance with law. Appeal of the assessee is treated as allowed for statistical purposes.
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