TMI Blog2016 (10) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 without further verification. The addition on the basis of entries in AIR as the these entries are made by the parties other than the assessee and can not be sustained In this case, the assessee claimed to have not executed contract and claimed that the income never materialized and therefore cannot be form part of income in the books of account which was not verified by the AO at all. Similarly the ld CIT(A), the ld.CIT(A) confirmed the action of the AO on the ground that the TDS of ₹ 76,591/- 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 or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he difference of ₹ 33,80,000/- to the total income of the assessee by noting that the assessee failed to prove the fact of not having performed the contract. 3. During the appellate proceedings before the First Appellate Authority, the ld. CIT(A) also dismissed the appeal of the assessee on this ground that the assessee took 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 considering the issue, I find myself not in agreement with the statement of the appellant that the AO should not have made an addition of ₹ 33,80,000/- in its case. It is seen that the AO has made the said addition in respect of the amount reported in the AIR information and on the basis of the fact that even though the appellant had claimed TDS benefit in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 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 said letter, it is also noticed that DLF Services Ltd. will pay the appellant the due amount within 22 days of the appellant raising a Performa invoice in the activity month. The appellant has submitted the said letter with a rider stating that if the said amount of ₹ 33,80,000/- is treated as receipt then only 2.75% of the same should be treated as income of the appellant as the terms of contract show that the appellant would receive a commission equivalent to 2.75% of the total media cost 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 rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LF Services Limited had deduced tax of ₹ 76,591/- on the total sales of ₹ 33,80,000/- whereas as a matter of fact the said contract 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 information was not justified and fair and also not sustainable in the eyes of law as the AO has not discharged his onus once the assessee filed the necessary details as to DLF Services Ltd. Finally the prayed that the addition was also wrongly upheld by the CIT(A) which has no basis and made without verification as the contract was never executed and performed and therefore the addition be ordered to be deleted. 5. On the other hand, the ld DR heavily relied on the orders of authorities below. 6. We have carefully considered the submissions of the parties, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.1.1.2, therefore dismissed as not pressed. 8. The issue raised in the ground of appeal No.1.1.3 has been taken care of in the ground no.1.1.1, therefore need not to be adjudicated upon. Accordingly dismissed as infructuous. 9. The issue raised in ground no.1.2.1 is with regard to confirmation of addition of ₹ 6,22,705/- by the ld. CIT(A) as made by the AO in respect of provisions for sundry balances written off. During the course of assessment proceedings, the AO found that the assessee has debited provisions for sundry balances written 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 assessee as stated in assessment order. However upon realizing the mistake the assessee raised the issue before the First Appellate Authority by submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 under the head operating and general expenses in which the last second item was provisions for doubtful debts ₹ 5,86,721/- and last first item was miscellaneous expenses to the tune of ₹ 2,142,548/-. The ld. counsel further pointed out that the sundry balances written off of ₹ 6,22,705/- were included in miscellaneous expenses which were actually written off amounts and not provision for the doubtful debts as has been observed by the authorities below which were appearing separately 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 Deb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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