TMI Blog2014 (3) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... , the order of the CIT(A) upheld – Decided against Assessee. Difference between the Operating income disclosed by the assessee and the amount shown in the TDS certificates – Held that:- The CIT(A) has deleted the addition in both the years on the basis of sample bills and the reconciliation statements furnished to him by the assessee - mere reimbursement of expenses on actual basis would not give rise to any income assessable in the hands of the assessee – the AO did not examine the books of account to satisfy himself about the veracity of the said claim put forth by the assessee – the practical position in conducting the business has not been appreciated by the AO – thus, the matter is remitted back to the AO for fresh adjudication – Decided in favour of Revenue. - I.T.A. Nos. 765 & 766/Coch/2013, I.T.A. Nos. 785&786/Coch/2013 - - - Dated:- 14-3-2014 - Shri N. R. S. Ganesan, JM And B. R. Baskaran, AM,JJ. For the Petitioner : Smt. Latha V. Kumar, Jr. DR For the Respondent : Shri P. K. Sasidharan, CA ORDER Per B. R. Baskaran, Accountant Member: These cross appeals are directed against the orders passed by the Ld. CIT(A)-II, Kochi and they relate to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... never the amount is reimbursed by the customers, the same is credited to the above said Expenses recoverable account . The assessee further submitted that there is no income element on the expenses incurred on behalf of the customers, since the reimbursement takes place on actual basis. The assessee submitted that it has duly offered the receipts relating to transport charges and services charges as its income by crediting them to the profit and loss account, as they only constitute its operating income. 3.1 However, the Assessing officer took the view that the assessee has not substantiated the above said explanations with documentary evidences. Accordingly, he rejected the same and assessed the difference amount shown in the tabulation as the income of the assessee in the respective years. 4. Before the Ld. CIT(A), the assessee challenged the re-opening of the assessment for both the years and also the addition made by the Assessing officer in both the years. The Ld. CIT(A) upheld the validity of re-opening of the assessment and deleted the additions made by accepting the claim of the assessee that the difference represents the reimbursement of the expenses and further it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the expiry of four years and there is no failure on the part of the assessee to disclose the materials fully and truly. Accordingly he contended that the re- opening of assessment is bad in law on that ground also. 6. On the contrary, the Ld D.R strongly supported the order of Ld CIT(A) and submitted that there was difference in the quantum of operational income shown in the Profit and loss account and that shown in the TDS certificates, which has led the assessing officer to believe about the escapement of income. 7. We have heard the rival contentions on this issue. Admittedly, there is difference in the quantum of Operational income shown in the Profit and loss account and that was shown in the TDS certificates. We have also tabulated the said difference in an earlier paragraph. The Ld A.R fairly admitted that the reasons for the difference were not examined by the assessing officer during the course of original assessment proceedings. At this juncture, we may refer to the Explanation 1 to sec. 147 of the Act, which reads as under:- Explanation 1 :- Production before the Assessing officer of account books or other evidence from which material evidence could with du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld CIT(A) has called for a remand report from the assessing officer. In the remand report, the assessing officer has only expressed his reservations like possibility of leakage, possibility of inflating expenses etc., without bringing any material on record. Accordingly, the Ld A.R submitted that the Ld CIT(A) has deleted the disallowances after analyzing all the facts relating to the addition made by the AO. 8.1 However, the Ld D.R submitted that the assessee has given only oral explanations without producing the relevant materials to substantiate its claim. The Ld D.R submitted that the assessee did not produce the relevant documents to prove that the expenses were incurred on behalf of the customers and it got reimbursements on actual basis. The Ld D.R further submitted that the relevant documents have not been verified by the Ld CIT(A) also. Accordingly, the Ld D.R submitted that the claim made by the assessee requires proper verification. 9. We have heard the rival contentions on this issue and perused the record. We notice that the Ld CIT(A) has deleted the addition in both the years on the basis of sample bills and the reconciliation statements furnished to him by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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