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2015 (9) TMI 1344 - ITAT MUMBAI

2015 (9) TMI 1344 - ITAT MUMBAI - TMI - Addition on un-reconciled professional receipts on the basis of difference between the information gathered from the Annual Information Report(AIR) and professional receipts declared as per books of account - Held that:- We set-aside the order of the CIT(A) and direct the Assessing Officer to delete the addition on the ground that the differences between the information gathered from AIR and the professional receipts as per books of account is not corrobor .....

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been considered by the Tribunal in the assessee’s own case for A.Y 2000-01 and 2001-02 and we agree with the submission made by ld. A.R that the interest payable under section 234B for the purpose of adjustment against the tax paid under section 140A has to be computed with respect to assessed tax determined on the basis of total income declared in the return. But this is only for the limited purpose of adjustment of payment made u/s. 140A against interest payable under section 234B while making .....

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UM/2012 - Dated:- 31-8-2015 - SHRI G.S.PANNU AND SHRI AMIT SHUKLA, JJ. For The Assessee Shri Girish Dave and Ms. Kadambari Dave For The Revenue Shri Premanand J. ORDER PER G.S. PANNU,AM: The captioned appeal is preferred by the assessee and is directed against the impugned order dated 09/08/2012 of CIT(A)-3, Mumbai pertaining to the assessment year 2009-10, which in-turn has arisen from the order passed by the Assessing Officer dated 29/12/2011 under section 143(3) of the Income Tax Act, 1961 (i .....

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sional services and was maintaining its books of account on receipt/cash basis. It has been pointed out that the assessee firm receives its professional fees through banking channels. In the course of assessment proceedings, assessee was asked to reconcile the amount of professional receipts declared in the books of account with the information gathered from the AIR. The details in this regard, i.e., the name of the party; the amount as per AIR; the amount recorded in the account books; and, the .....

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o, assessee reiterated its stand and contended that no addition was sustainable having regard to the explanations and material furnished. The CIT(A) also has tabulated the difference in accounts as well as the material and explanations rendered by the assessee, but he has disagreed with the assessee except for an amount of ₹ 8,093/- and, accordingly, the balance of ₹ 28,43,777/- has been retained as unreconciled professional receipts. 4. Before us, the Ld. Representative for the asse .....

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e assessee in its books of account. The explanation rendered by the assessee before the lower authorities, which has been reproduced in the respective orders, have also reiterated before us. Apart there-from, the Ld. Representative for the assessee referred to the following decisions of the Mumbai Bench of the Tribunal for the proposition that no addition could be made solely on the basis of the AIR information without cross checking with the respective parties:- 1. A. F. Ferguson & Co., ITA .....

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arties and on account of non-reconciliation the amount has been correctly assessed in the hands of the assessee firm. 6. We have carefully considered the rival submissions. Pertinently, it is not in dispute that the assessee is maintaining its books of account on receipt/cash basis. It is also an established position between the assessee and the Revenue that the professional receipts declared by the assessee in its books of account have been received through banking channels. In principle, the a .....

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by the assessee with respect to each of the parties, which are found tabulated in the order of the CIT(A). In the case of three parties, namely Saraf Chemicals Ltd., SBI Capital Market Ltd., BMD Chemicals Pvt. Ltd., the AIR information revealed certain amount of professional receipts, whereas as per the books of account maintained by the assessee there was nil receipt from the said three parties. The assessee asserted that no services were rendered by it and nor any invoice was raised on the th .....

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g the respective invoices raised by DHS on the three parties and in two of such cases i.e. SBI Capital Market Ltd. and BMD Chemicals Pvt. Ltd., necessary confirmations from the said concerns were also furnished. In our considered the opinion in view of the aforesaid factual matrix, which is undisputed, there was no justification for the CIT(A) to have held that the difference in the professional receipts based on the AIR information was to be assessed in the hands of the assessee. We, therefore, .....

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tended that the differences are only on account of punching error in the ETDS return filed by the clients. On this aspect also we find that the assessee has discharged his burden and in the absence of any cogent material with the Revenue the explanation has been unjustifiably rejected. On this aspect also we set aside the order of CIT(A) and direct the Assessing Officer to delete the respective additions. 6.2 Furthermore, with regard to the difference noticed in relation to Mafatlal Holding Ltd. .....

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d, therefore, no amount of professional fee was declared and further the invoices were cancelled as they were outstanding since long time and there were rare chances of recovery. On this aspect also, we are unable to sustain the action of CIT(A) in sustaining the addition, because the accounting treatment of the assessee is to account for professional receipts on cash/receipt basis and there is no material to establish that assessee had received the impugned sum. Therefore, on this aspect also w .....

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,777/- on the ground that the differences between the information gathered from AIR and the professional receipts as per books of account is not corroborated by any third party evidence to suggest any nondisclosure of professional receipts by the assessee for the year under consideration. Thus, on this aspect the assessee succeeds. 7. The only other issue raised by the assessee is with regard to the computation of interest chargeable under section 234B of the Act. On this aspect, the only point .....

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for the purposes of section 140A has been defined to mean tax on the total income declared in the return as reduced by the amount of tax deducted/collected at source, etc. 7.1 On this aspect, Ld. Representative for the assessee has pointed out that identical controversy has been considered by the Tribunal in the assessee s own case for A.Y 2000-01 and 2001-02 vide ITA NO.7450/Mum/2004 dated 21/5/2010 and the stand of the assessee has been approved. Following discussion in the order of the Tribu .....

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interest and the balance amount shall be adjusted against the tax payable. In this case, the tax payable under section 140A also included interest payable under section 234B. The issue is whether the interest payable under section 234B which has to be first adjusted against the payment made under section 140A has to be calculated with respect to total income as declared in the return or total income determined in the regular assessment. We find that the section 140(1B) provides that interest pa .....

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