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2016 (10) TMI 4 - ITAT MUMBAI

2016 (10) TMI 4 - ITAT MUMBAI - TM - Addition in respect of alleged sales to DLF Services Limited - amount as per TDS not disclosed - addition in this case has been made by the AO on the basis of AIR information which shows that the amount of ₹ 33,80,000/- was paid/credited in favour of the assessee on a/c of sale of advertisement pace by the assessee and accordingly TDS of ₹ 76,591/- was also shown to be deducted - Held that:- The said amount of TDS was also claimed by the assessee .....

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never materialized can not be said to have accrued to the assessee and therefore cannot be considered as income of the year under consideration regardless of the facts that the TDS was deducted by M/s DLF Services Limited. In the present case before us, we find that the AO has not bothered to further verity the facts qua the entries in AIR information whereas the information as regards M/s DLF Services Limited were available with the AO and he proceeded to rely on the AIR information solely with .....

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- was deducted on the sales of ₹ 33,80,000/- which proved that the assessee had made the sale to M/S DLF Services Ltd is also wrong.In view of these facts as discussed above, we are of the considered opinion that the order by the ld. CIT(A) cannot be sustained and we ,therefore, set aside the order of ld. CIT(A) and direct the AO to delete the addition.- Decided in favour of assessee - Addition on provisions for sundry balances written off - Held that:- The details of miscellaneous exp .....

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ted:- 16-8-2016 - SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI RAJESH KUMAR, AM For The Appellant : Smt. Aarti Visanji For The Respondent : Shri Shivaji B Ghode ORDER PER RAJESH KUMAR, A. M: This is an appeal filed by the assessee and is directed against the order of the Ld.CIT(A)-12, Mumbai dated 7.12.2012 pertaining to A.Y.2009-10. Ground No.1.1.1 is against the confirmation of addition of ₹ 33,80,000/- by the ld. CIT(A) as made by the AO in respect of alleged sales to DLF Services Limited d .....

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issuing a show cause notice to explain difference of ₹ 33,80,000/- and as to why the same was not credited in the profit and loss account whereas the corresponding TDS on the said amount was duly claimed by the assessee in its return of income. The assessee in reply to the show cause notice submitted before the AO that it had wrongly claimed TDS of ₹ 76,591/- which was deducted on a contract which was never executed and ultimately cancelled. No confirmation letter from DLF Services .....

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k credit of TDS on an amount of ₹ 33,80,000/- which proved that the corresponding income also accrued to the assessee which was not accounted for by the assessee in the books of account and shown in the profit and loss account. The CIT(A) dismissed the ground by rejecting the submissions and arguments of the assessee as the assessee could not provide the even the provisional bills even on which the TDS was deducted by DLF Services Ltd by observing and holding as under:- 3.4 Carefully consi .....

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AO had given the appellant an opportunity to explain its case as to why it had claimed the benefit of the tax deducted at source when the corresponding income had not been offered for taxation. The AO had also asked the appellant to reconcile the said entry as found in the AIR which showed that the appellant had received an amount of ₹ 33,80,0001- from DLF Services Ltd. It is seen that on being so confronted the appellant had withdrawn its claim of tax deducted at source as made in the co .....

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ments had been furnished by the appellant. It was also not stated as to what the service that had to be rendered was and why it was not rendered. Under the circumstances, the observation of the AO that all income had not been offered for taxation by the appellant cannot be held to be incorrect. During the course of appellate proceedings, I find that the situation has remained the same. The appellant has reiterated the submission as made before the assessing officer. Besides this, an affidavit ha .....

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go to prove that the amount of ₹ 33,80,000/- was never received by the appellant. The appellant has stated that it is filing a copy of the contract as signed with DLF Services Ltd. which would clear the issue. However, the same has not been done. In fact, what has been filed is a letter dated 5/12/2008 which states that the actual contract and the legal terms are being finalized and pending the same the commercial terms of understanding is being captured in the letter. According to the sa .....

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and that the media cost in respect of media booking etc. shall be borne by DLF Services Ltd. Under the circumstances, it is seen that the letter would have no meaning in the present context as it is not a concrete agreement but a general letter, which does not carry any specific details of the work concerned. Secondly, it is also seen that regarding the other receipts from DLF Services Ltd. received in the year the appellant has offered the total amount of receipt as its income. No claim regardi .....

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on should be restricted to only 2.75% of ₹ 33,80,000/-. Besides, it is also to be considered as stated earlier that the said letter is not the actual contract. The actual contract was never of the appellant and is therefore irrelevant to the present issue. It has also not been explained by the appellant as to why it had claimed the benefit of tax deducted at source when it was very much aware of the fact that it had not undertake in the activity or raised the final invoice for it to have r .....

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a written invoice. For stating that it was an estimate or likewise only and not actual invoice on which TDS had been wrongly deducted as no final sale invoice was raised due to work not done, the appellant was required to submit proof of the same. It is a well known fact that no TDS can be claimed without corresponding income. The very fact that the appellant has claimed tax deducted at source benefit would go to show that there did arise a corresponding income in the case of the appellant whic .....

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ct never executed and materialized and income was not accrued in favour of the assessee though admitting that the claim of TDS was made in the return of income by the assessee but the same was reversed and revised the movement the assessee reconciled AIR data and the said claim of TDS was reversed immediately. It was also argued that the AO has not made any further inquiry from DLF Services Limited in order to verify the AIR information and merely made the addition on the basis of AIR informatio .....

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carefully considered the submissions of the parties, perused the material placed before us including the orders of authorities below. We find that the addition in this case has been made by the AO on the basis of AIR information which shows that the amount of ₹ 33,80,000/- was paid/credited in favour of the assessee on a/c of sale of advertisement pace by the assessee and accordingly TDS of ₹ 76,591/- was also shown to be deducted. The said amount of TDS was also claimed by the asse .....

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thus never materialized can not be said to have accrued to the assessee and therefore cannot be considered as income of the year under consideration regardless of the facts that the TDS was deducted by M/s DLF Services Limited. In the present case before us, we find that the AO has not bothered to further verity the facts qua the entries in AIR information whereas the information as regards M/s DLF Services Limited were available with the AO and he proceeded to rely on the AIR information solely .....

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,591/- was deducted on the sales of ₹ 33,80,000/- which proved that the assessee had made the sale to M/S DLF Services Ltd is also wrong.In view of these facts as discussed above, we are of the considered opinion that the order by the ld. CIT(A) cannot be sustained and we ,therefore, set aside the order of ld. CIT(A) and direct the AO to delete the addition of ₹ 33,80,000/-. 7. At the time of hearing, the ld. AR did not press ground No.1.1.2, therefore dismissed as not pressed. 8. Th .....

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off to the tune of ₹ 6,22,705/- in the profit and loss account which were not added back to the income of the assessee at the time of filing of the return of income and accordingly assessee was issued show cause notice which was replied vide letter dated 24.12.2011 submitting therein that the provisions remained to be disallowed inadvertently and offered the same to the AO to be added to the income of the assessee and accordingly the AO added ₹ 6,22,705/- to the income of the assess .....

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ld. CIT(A) have not found the reply of the assessee convincing and dismissed the appeal by observing and holding as under: 4.3 Carefully considering the above submissions made by the appellant, I find that the appellant has been submitting mutually contradictory statements all along from the time of assessment proceedings to the final date of appellate hearing. The appellant, I find, itself is not very aware of its own accounts and as to why a certain debit has been claimed. In the final reply .....

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infirmity in the order of the AO which has been passed after taking the reply of the appellant into consideration. As stated in the said order it is seen that the addition has been made as requested by the appellant on a query raised by the appellant. Contradictory statements filed subsequently as a ground of appeal, statement of facts and submission do not help the case of the appellant at all. In fact, the ground of appeal has been raised on very different fact than what the appellant as now .....

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ictory and cannot thus be accepted. This ground of appeal therefore would need o be dismissed and the action of the AO would need to be confirmed . 10. The ld. AR vehemently submitted before us that the provisions of sundry balances written off were of ₹ 6,22,705/- were not provisions but actual bad debts written off on account of non-payment of service tax by ONGC and RBI. The ld. AR attempted to explain the issue by drawing our attention to page No.21 of the paper book i.e. Schedule -12 .....

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ately as second last item in the above schedule. The ld. Counsel further drew out attention to page 22 of the paper book which contains the details of miscellaneous expenses for the year ending on 31.3.2009 which included Sundry Debit Balances Written off appearing at item no. 9. The ld. Counsel finally submitted that since the amount written off of ₹ 6,22,705/- represented the actual bad debts written off as corroborated by the audited balance sheet of the assessee and prayed that same be .....

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