TMI Blog2023 (10) TMI 1263X X X X Extracts X X X X X X X X Extracts X X X X ..... LDIP SINGH, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER For the Appellant : Shri Pratik Shah, A.R. Shri Yogesh Malpani, A.R. For the Respondent : Shri Parsoon Kabra, D.R. ORDER Per : Kuldip Singh, Judicial Member: The appellant, M/s. BBH Communications India Pvt. Ltd. (hereinafter referred to as the assessee ) by filing the present appeal, sought to set aside the impugned order dated 02.12.2022 passed by the National Faceless Appeal Centre(NFAC) [Commissioner of Income Tax (Appeals), Delhi] (hereinafter referred to as CIT(A)] qua the assessment year 2013-14 on the grounds inter-alia that :- 1. On the facts and circumstances of the case and in law the CIT(A) erred in deleting the addition made by the AO on account of difference between income as per financials and income as per Form 26AS. 2. On the facts and circumstances of the case and in law the CIT(A) erred in deleting the addition on account of difference between income as per financials and income as per Form 26AS without appreciating the fact that the assessee has failed to furnish documentary evidences to substantiate its claim. 3. On the facts and circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2/- in form 26AS vis- - vis P L Account which is extracted for ready perusal as under: At the outset, it is humbly submitted that the difference between the income as per Form 26AS and income amounting to INR 2,26,98,042 as per the audited books of accounts in the instant case are primarily on account of the following reasons: 1. Difference on account of service tax INR 3,33,01,067 2. Difference on account of income offered to tax by the Appellant in the ROI of the year but reflected in Form 26AS of next year INR 1.52,83,936 3. Difference on account of income offered to tax by the Appellant in the ROI of the preceding financial year or the subsequent year but reflected in Form 26AS of the year under consideration INR 89,23,743. 4. Difference on account of income offered to tax in ROI of the year under consideration but not reflected in Form 26AS INR 33,63,251. 5. Difference due to other reasons INR 8,82,939. A copy of Form 26AS for the year under consideration is enclosed herewith as Annexure 4 for your goodself kind reference. For case of reference, the below table captures the reconciliation of difference in Income in Form 26AS vis- - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... industan Unilever Limited 9,44,34,461 1,03,05,721 4. TVS Motor Company Limited 1,64,60,194 18,10,680 5. Bharti Telecom Limited 3,30,546 36,361 6. Mario Limited 4,88,15,87 1 53,69,920 7. Red Bull India Private Limited 85,36,418 9,39,036 8. Diageo India Private Limited 2,38,25,185 26,20,855 9, World Gold Council 1,26,02,590 13,86,330 10. World Gold Council (India) Private-Limited 4,80,552 52,862 11. Zoom Entertainment Network Limited 68,43,717 7,49,935 12. Skoda Auto India Pvt. Limited 4,28,02,959 47,08,478 13. Bhart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence of INR 1,52,83,936 on account of Income offered during the year under consideration but reflected in Form 26AS of the next year (i.e. AY 2014-15) AND Difference of INR 89,23,743 on account Income offered in ROI of the preceding year (i.e. AY 2012-13) but reflected in Form 28AS of the year. With regard to the above, the Appellant would like to humbly submit that the difference of INR 1,52,83,936 [referred in (B) above] forms part of the total Income offered to tax by the Appellant in the ROI for the year under consideration. However, the said income and the corresponding TDS is reflected in Form 26ASofthe subsequent financial year (i.e. AY 2014-15). Furthermore, the difference of INR 89,23,743 [referred in (C) above] represents the income of the Appellant which has already been offered to tax by the Appellant in the preceding financial year (i.e. AY 2012-13). However, the said income is reflecting in Form 26AS of the year under consideration. The details of the documentary evidence and information showing the break-up of the difference stated in (B) and (C) above is enclosed herewith as Annexure 6. Considering that there is no modification I variation in the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of INR 8,82,939 due to miscellaneous reasons With regard to the above, it is humbly submitted that the difference of INR 8,82,939 is on account of provisions of expenses created by the Customers of the Appellant as well as the reimbursement paid to the Appellant during the year under consideration on which taxes have been deducted at source by the customers. For ease of reference, the details of the documentary evidence and information showing the break-up of the difference stated in (E) above is enclosed herewith as Annexure 8. 6. The Ld. CIT(A) then has duly dealt with the reasons for difference of Rs. 2,26,98,042/- as pointed out by the AO in the assessment order as under: 4.2 It could be seen from the above explanation of the assessee that this was already presented to the AO at the time of assessment. There are five items of reconciliation which are discussed as follows. (i) It is seen that the sum of Rs. 3,33,01,067 is a difference on account of service tax which was included in the receipts as per Form 26AS. The clients of the assessee have deducted tax at source on not only the principal amounts paid to the assessee but also on the service tax component. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd TDS declared vis- -vis gross revenue declared as per form 26AS amounting to Rs. 25,10,18,425/- in assessee s own case for A.Y. 2012-13 has also been decided by the Tribunal in ITA No.09/Mum/2022 dated 27.03.2023 in favour of the assessee. 8. In view of the matter, we are of the considered view that from the undisputed facts brought on record it is proved that the major difference of Rs. 3,33,01,067/- is on account of service tax which was included in the receipt as per form 26AS on which the clients of the assessee have deducted tax at source, not only on the principle amounts paid to the assessee but also on the service tax component. Moreover, the assessee is following exclusive system of accounting which is otherwise not disputed by the department vide which indirect tax component is not routed through the P L account neither as income nor as expense. 9. As discussed in the impugned order the second difference of Rs. 1,52,83,936/- is on account of the income offered by the assessee in the year under consideration which is reflected in form 26AS of the subsequent assessment year 2014-15. Another income of Rs. 89,23,743/- which is income offered in 2012-13 but reflected i ..... 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