The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) in Delite Properties Private Limited v. ITO has ruled that, Same Income can’t be Taxed Twice Even Though It is Erroneously Offered in two different years.
In the instant case, the addition of disallowance which amounted to 30% of the claim on account of service and supervision charges made by the assessee was challenged. The said amount was disallowed on the ground that assessee had not produced any bill in respect of such payments instead of that, had produced self-made vouchers towards payments made. The Ld.CIT(A) had upheld the order passed by the Ld.AO that such expenses were not supported by the cogent material.
The ITAT found that when A.O allowed 70% of total expenses made on account of service and there was no reason to reject the balance 30% of it. The judgment of Hon’ble Madras High Court in CIT v. Lakshmi Vikas Bank Ltd was relied upon. The court had held that when revenue had thought fit to allow 90% of the claim there was no reason to reject the balance 10%. Taking into consideration the entire aspect of the matter, the ITAT held that the order passed by CIT(A) is incorrect and not sustainable in the eyes of law.
Another ground of appeal was an addition by way of disallowance of 30% of the claim incurred on professional and legal charges. The CIT(A) had confirmed the order of A.O is disallowing the claim. The ITAT held that it could not justify the conduct of assessee to substantiate the genuineness of such expenses in it’s entirety in the absence of valid documents and allowed 15% of the claim and deleted 15% of the addition made by A.O in this regard.
The last ground of appeal, related to addition of certain sum for bad and doubtful debts written back during the A.Y and reduced from other expenses. The assessee had prayed upon the A.O to reduce the said amount from total income on account of provision for bad and doubtful debts written back in accounts. The said amount was written back in the account for relevant year. It was due to the ignorance of the accountant, the same amount was wrongly taxed. During auditing, wrong presentation of account skipped the notice and attention of the auditor.
During the assessment proceedings, the assessee had requested the A.O to exclude the same from income as it was not lawfully to be taxed. The A.O had rejected the said claim on the ground that since no revised return was filed, the claim for exclusion of the same cannot be entertained.
The ITAT held that non-acceptance of assessee’s prayer for lawful exclusion of the amount have resulted to wrong determination of income for the relevant year. It added that taxation of same amount in two different years is a violation of principle that no piece of income can be taxed twice. It relied on the judgment passed by Hon’ble Chennai Tribunal in R Naragjun v ACIT wherein it was held that same income cannot be taxed twice even though it is erroneously offered in two different years. It set aside the orders of lower authorities and directed the A.O to decide the same afresh.
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