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Susanta Biswas Versus Income Tax Officer Ward 50 (4) , Kolkata

2017 (2) TMI 326 - ITAT KOLKATA

Undisclosed current asset - outstanding balance receivable being not reflected the same in the balance sheet as on 31-03-06 - Held that:- We find that the impugned amount of ₹ 3,70,244/- remained as unpaid as on 31-03-2006 as the Simplex Infrastructures Limited to whom the Assessee rendered services retained the same as retention money for realization of liquidated damages, if any, for the work executed by the Assessee and according to Assessee, the realization of the amount was uncertain .....

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ons of the Ld.AR that the tax was offered on the total value of contract work and we find force in the arguments of the Assessee that income once taxed can not be taxed again, we hold that the impugned addition was part of gross receipt and as shown income in the profit and loss account, thus, it can not become an addition again bringing the same for taxation for not following the principles of accountancy. - Decided in favour of assessee - ITA No. 1338/Kol/2012 - Dated:- 3-2-2017 - Shri M.Balag .....

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ffective issue is that whether the CIT-A justified in confirming the addition of ₹ 3,70,244/- treating the same as undisclosed current asset on account of outstanding balance receivable being not reflected the same in the balance sheet as on 31-03-06 in the facts and circumstances of the case. 3. The assessee is an individual and engaged in the business of contract work. The assessee filed his return of income on 20-09-2006 declaring total income at ₹ 2,04,640/-. Under scrutiny, noti .....

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eal before the Tribunal, wherein the Tribunal directed the AO to re-decide the issue taking into consideration the additional evidences as filed by the assessee vide its order dated 01-12- 2010 passed in ITA No. 2112/Kol/09. 4. As matter stood thus, the case of the assessee was transferred to ITO, Ward 50(4), Kolkata from Durgapur. The AO exercising jurisdiction under transfer as said above re-fixed the hearing in compliance with the order of the Tribunal, Kolkata and in response to which throug .....

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to the income of the assessee and the said amount was not shown in the balance sheet being outstanding receivable in the form of its current asset and though it was included in the gross receipts to the profit & loss account. The assessee took a plea that he maintains his accounts on the basis of actual payment and credit as per TDS certificates. But, however, according to AO, the assessee should have accounted the said amount in the balance sheet as per the mercantile system of accounting a .....

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,210/-. The assessee contended that amount of ₹ 3,70,244/- was remained unpaid as on 31-03-2006 towards retention money for realization of liquidated damages if any for the work executed by the assessee, thereby the assessee did not show the impugned amount as receivable in the balance sheet as the realization of the said amount was uncertain and submitted that the tax was offered on the total value of contract work i.e ₹ 1,33,52,210/- in the year under consideration. 6. Further, the .....

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sion of Hon ble Supreme Court in the case of UCO Bank of vs. CIT reported in 240 ITR 355 for the that real income theory cannot be ignored by holding that the Balance Sheet to be maintained in a particular form. 8. For the proposition that taxability has to be decided in accordance with the provisions of law and not on the basis of the entries which the assessee may choose to make in his accounts and placed on reliance in the case of CIT v. Mogul Line Ltd reported in [1962] 46 ITR 590 (Bom). 9. .....

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to delete the addition of ₹ 3,70,240/- as made by the Assessing Officer. 10. The CIT-A found the assessee filed some documents as directed by the Tribunal during the appellate stage and sought remand report from the Assessing Officer vide this office letter No. CIT(A)-XXXII/Kol/Remand Report/12-13/178 dated 25.06.2012. The A.O sent remand report vide letter No. ITO-50(4)/Remand Report/Kol/2012-2013/152 dated 29.06.2012 which was sent through JCIT, Range-50, Kolkata vide letter No. JCIT/R- .....

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le System of Accounting. According to the submission of the assessee and the confirmation received from the party u/s. 133(6) of the Act, 1961 it was stated as retention money/security deposit. As the assessee was maintaining Mercantile System of accounting as per the Tax Audit Report for the year under assessment it ought to be reflected in the relevant B/sheet as per I.T Act, 1961. Hence ₹ 3,70,240/- was treated as undisclosed current asset and addition to the Total Income was made accor .....

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are facts that the amount outstanding in the name of the Simplex Infrastructures Limited is not reflected in the balance sheet. The argument of the appellant that this amount is offered already and this is double Taxation. This is not correct because this matter is not double taxation. The appellant concealed the income by not showing the receivable balance in the Balance Sheet in the assets side. Assets side of the balance sheet shown lesser to the tune of ₹ 3,70,240/- due to not showing .....

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accounting cannot override the provision of tax statute. This is not in this case. In this case the appellant concealed the income of ₹ 3,70,240/- by not showing the balance of ₹ 3,70,240/- of Simplex Infrastructures in assets side. Considering the above finding I am of the view that the action of the AO treating ₹ 3,70,244/- as undisclosed income is as per law. Hence, I confirm the addition made by the Assessing Officer of ₹ 3,70,240/-. Therefore, these grounds are disa .....

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