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TMI Blog2012 (12) TMI 1137X X X X Extracts X X X X X X X X Extracts X X X X ..... ural justice, therefore the assessment is liable to be quashed. 5. For that the Assessing officer has issued notice for reassessment, when the regular assessment is open. It is settled law that no reassessment proceedings can be initiated so long as assessment proceeding on the basis of return is already filed are not terminated. Therefore the order passed u/ss. 147/143 of the income tax Act is illegal and liable to be quashed. 6. For that the addition of Rs.59,91,726 relying on the 26AS statement without verifying the Audited accounts furnished in course of assessment is arbitrary. Further the Statutory Auditor categorically mentioned in his notes of accounts which is part of the Audited Balance sheet that accounts are maintained on cash system of accounting. Both the A.O as well as the CIT (Appeals) has over looked this fact. Therefore the entire proceeding is non application of mind and liable to be quashed. 7. For that the order passed by the Ld. CIT (appeals) by disallowance of employees' EPF and ESI contributions is per incuriam, since the issue stood resolve by the Hon'ble Supreme Court in the case of Alom Extrusion Ltd case reported in 319 ITR 306." 2. Ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of Rs. 34,42,935 has been received during the financial year 2008-09 and some of the amount shown is still not received. In support of the above contention, the learned Counsel of the assessee filed a Statement containing the details of payments received during the immediate subsequent year as Annexre-1 of the Paper Book. He contended that since the entire amount shown in the 26AS statement has not been received during that financial year, the assessee has not credited the entire amount in the profit and loss account. In course of the proceeding u/s 147 the Assessing Officer without verifying the tax audit report, added the differential amount as undisclosed source of income. Had he verified the audited account, he could know the system of account is being followed by the assessee regularly. He contended that the Assessing Officer has made a gross mistake in treating the accounts maintained on actual receipt basis as mercantile system of accounting. Therefore the assessment completed in confused manner without verifying the audited account produced is a non application of mind and liable to be quashed. 5.1. The learned Counsel of the assessee further submitted that in course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. Had it been a case of mercantile system of accounting they would have been correct that the Assessee has booked all the expense there is nothing to be claimed. The learned Counsel of the assessee further submitted that Statement 26AS is nothing but a statement issued on behalf of the Income tax department on the basis of the details given by the deductors. The facts and figures of the 26AS statement are purely third party information should not have been treated as genuine figure for making addition. After introduction of Section 40(a) (ia) the deductors deducting tax on both the amount paid and payable to avoid disallowance of expenses. In the assesse's case the contractee departments have deducted tax on the entire amount payable, therefore there is a mismatch between the turnover shown by the assessee and the amount shown in the 26AS statement. Further the assessee maintains his account in receipt basis and the Contractee departments maintain their account in mercantile basis, which is another reason for mismatch. In fact there is no undisclosed contract receipt, rather it is a mismatch of contract receipt. Further sometimes the deductors deducts tax arbitrarily adopti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nting it followed. The deductors have to deduct tax at source even after the amounts are payable or credited to the account of the assessee to meet the deadline of the tax so deducted to be deposited with the government Department in accordance with the provisions of Section 200 of the I.T.Act. Therefore, the Assessing Officer confined himself to non-disclosure of the contract income from the information available from the tax deductors was to be reconciled to the fact that the Assessing Officer has given credit of the TDS to the assessee less than the amount so disclosed in the AS-26. The learned Counsel of the assessee has submitted that as can be perused in the financial statements that the assessee had to pay the service tax from its own pocket when the part of the service tax has been paid for the impugned year or receipts which the deductors have not considered as payment, obviously they would not have deducted tax on the amount of service tax which income remains undisclosed. Service tax is a statutory liability which when charged has to be paid and not because the assessee was to bear the same as expenditure which expenditure the Assessing Officer noted had been claimed aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 190 has been deposited before date of filing of returns and therefore, the disallowance is not proper in view of the decision of Hon'ble Karnataka High Court in CIT v. Sabari Enterprises (298 ITR 141) and of Hon'ble Supreme Court in the case of CIT v. Alom Extrusions Ltd (319 ITR 306). The learned CIT(A) confirmed the disallowance observing that the decision in the case of Alom Extrusions Ltd., (supra) by Hon'ble Supreme Court has been considered by the ITAT, Kolkata and ITAT, Cuttack Bench while deciding against the assessee. 10. The learned Counsel for the assessee reiterated the submissions as were made before the learned CIT(A) and contended that the disallowance as made by the Assessing Officer and confirmed by the learned CIT(A) is not justified in view of the decision of Hon'ble Supreme Court in the case of CIT v. Alom Extrusions Ltd (supra). 11. The learned DR, on the other hand, supported the impugned orders of the authorities below and contended that the grace period for deposit of employees' share has to be taxed under the provisions of Section 2(24)(x) rightly confirmed by the learned CIT(A) by holding a view as decided by the ITAT, Kolkata. 12. Having heard both the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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