The Pune bench of The Income Tax Appellate Tribunal (ITAT) has recently upheld the addition made on mismatch in sales turnover reported in audit report and Income Tax Return (ITR).
Assesee Ravindra Arvind Ranade has e-filed his return of income on 29/09/2015 declaring total income of Rs. 76,87,580/-. The case of the assessee was selected for scrutiny on the reason of Mismatch in sales turnover reported in Audit Report and ITR.
The Assessing Officer (AO) has issued various notices to the assessee and requested to explain the difference. In response to the notices, the assessee has filed a reconciliation statement.
The Assesee followed a cash system of accounting for calculating Income tax and Mercantile system for the purpose of service tax. Also the difference was raised on account of different accounting systems.
AO made addition and held that no proper justification has been offered by the assessee in respect of the difference.
Aggrieved by the order, assessee filed an appeal before the CIT(A). The CIT(A) after considering the submissions of the assessee, upheld the addition made by the AO.
Aggrieved by the order of CIT(A), assessee filed the second appeal before this Tribunal
Before the tribunal Abhay Avachat, counsel for the assessee submitted that the assessee followed a cash system of accounting regularly and consistency and his books of account are subjected to tax audit.
The AO has made the addition on account of un-reconciled professional receipts/mismatch in receipts as per accounts.
The addition is based on a reconciliation statement furnished by assessee which compared actual receipts through cash and bank book vis-a-vis amount of sale credited to profit and loss account.
Hence there is no mismatch in sales, which was pointed out by assessee in assessment proceedings and thus no addition was made on this issue/norm.
M.G. Jasnani, counsel for the revenue, supported the decision of the lower authorities .
After considering facts substantiated by the both parties the tribunal observed that,the assessee’s case was mainly selected on ground of ‘mismatch’ between the figures shown by the assessee in income tax return vis-a-vis others. The AO has made the addition to the turnover of the assessee based on this mismatch only.
Further the tribunal noted that “the total receipts of the assessee for financial year 2014-15 are Rs. 1,95,44,540/-. Since the assessee follows a cash system of accounting, the total actual receipts of Rs.1,95,44,540/- will be the actual turnover of the assessee for financial year 2014-15. However, the assessee in the profit and loss account has shown the turnover of Rs.1,75,69,979/- only. Therefore, the AO has added the difference.”
Therefore the two member bench of the S.S.Godara, (Judicial Member) and Dr. Dipak P. Ripote, (Accountant Member) dismissed the appeal filed by the assessee.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
