Shroff Textile Exports Coimbatore v. Acit Non Corporate Circle 2 Coimbatore

B Smc In The Income Tax Appellate Tribunal B Smc Bench Chennai Before Shri Chandra Poojari Accountant Member I T A No 2161 Mds 2017 Assessment Year 2013 14 M S Shroff Textile Exports 42 Kannusamy Road R S Puram Coimbatore 641 001 Vs The Acit Non Corporate Circle 2 Coimbatore Pan Aanfs 2542 N Appellant Respondent Appellant By None Respondent By Mr B Sagadevan Jcit D R Date Of Hearing 22 11 2017 Date Of Pronouncement 05 12 2017 O R D E R Per Chandra Poojari Accountant Member This Appeal Is Filed By The Assessee Aggrieved By The Order Of The Learned Commissioner Of Income Tax A 2 Coimba Tore Dated 30 05 2017 Pertaining To Assessment Year 2013 14 Ita No 2161 Mds 2017 2 2 The Assessee Has Raised The Following Grounds F Or Consideration I The Learned Cit A Ought To Have Held That The Ao Was Not Right In Not Considering The Regular Method Of Accounting Follow Ed Continuously Without Rejecting The Same As Defective By The App Ellant To Include The Amount Of 1 26 283 Which Was Accounted In The Year Of Rece Ipt By The Appellant And Included In The Total Income Of The Appellant In The Facts And The Circumstances Of The Case And In Law 2 The Learned Cit A Ought To Have Held That The Ao Should Not Have Included The Amount Of 1 26 283 As Per Form 26 As Details In Question As Income Of The Previous Year Of The App Ellant In The Facts And The Circumstances Of The Case And In Law 3 For These And Other Additional Grounds Of Appea L That May Be Adduced At The Time Of Hearing The Order Of The Learned Ci T A 2 Coimbatore Upholding The Addition Of 1 26 283 Is Opposed To Law And Unsustainable In The Facts And The Circumstances Of The Case 3 The Brief Facts Of The Case Are That The Assess Ee Firm Is A Commission Agent And Has Filed Its Return Of Income For Assessment Year 2013 14 On 10 09 2013 Declaring Total Income O F 42 07 650 In This Case The Issue In Dispute Is Regarding Add Ition Of Commission Income Of 1 26 283 Reported In 26 As But Has Not Been Offere D To Tax During Scrutiny The Ao Verified 26 As Details And Found That The Ita No 2161 Mds 2017 3 Appellant Had Not Admitted Commission Income Of 1 26 283 Received From M S Winsome Yarns Ltd To Tax And Ad Ded The Above Sum To The Returned Income Aggrieved By This Addit Ion The Assessee Carried The Appeal Before The Ld Cit A 3 1 Before The Ld Cit A The Appellants Authoriz Ed Representative Shri B Krishnamoorthi Ca Herein A Fter Referred To As Ar Appeared And Explained That The Above Sum Of 1 26 2831 Was Actually Not Received During The Year But M S Winso Me Yarns Ltd Following Their Method Of Accounting Provided The Commission In Their Books And Deducted Tax Although They Were Disputing The Payment Of This Sum To The Appellant It Was Under These Circu Mstances The Appellant Did Not Account This Income Further The Appellant Was Following Cash Basis Of Accounting Upto Fy 2012 13 It Was The Practice Of The Appellant In The Past That As And W Hen Commission Payments Are Received It Is Offered As Income Of T Hat Year And Claim Credit For Tds On Such Income Though Tds Would Have Been Made By The Payer In The Previous Years On Accrual Basis Following This Method The Above Sum Was Offered To Tax In A Y 201 6 17 As It Was Ita No 2161 Mds 2017 4 Received From M S Winsome Yarns Ltd During The F Y 2015 16 And Corresponding Tds Was Also Claimed In A Y 2016 17 The Ar Filed A Chart Showing The Commission Incomes Received From Different Parties In Different Years And Offer Of Such Income In Different Assessment Years To Tax Though The Commission Was A Ppearing In Form No 26 As Of The Previous Years The Ar Submitte D That Since The Income Had Suffered Tax In Subsequent Year The Ao Ought Not To Have Made The Addition And Pleaded For Deletion Of The Same 3 2 The Ld Cit A Observed That Assessee Besides Earning Commission Income On Sale Of Yarn Etc Was Also En Gaged In Trading And The Regular System Of Accounting Followed Was M Ercantile System When Pointed About The Same The Ar Admitt Ed That Mercantile System Was Being Followed In Respect Of Trading Business Whereas Cash System Was Followed For Accounting Com Mission Till F Y 2012 13 The Ld Cit A Declined To Accept The Argum Ent Of A R That Appellant Can Follow Different Methods Of Accountin G For Different Heads Of Business Income In The Same Year It Has T O Follow A Uniform System Of Accounting For All Incomes Falling Under The Head Business Income The Earning Of Commission Was Also A Part Of The Ita No 2161 Mds 2017 5 Appellants Business As It Is In The Same Line That The Appellant Is Doing Trade Therefore The Ld Cit A Observed That The Ao Has Rightly Brought The Above Commission Income To Tax In This Year Following The Mercantile System Of Accounting As Ha S Been Followed By The Assessee For Other Business Incomes Accord Ing To Ld Cit A The Party After Having Credited The Appellants Ac Count And Deducting Tax Could Not Have Disputed The Payment As Such An D Also The Appellant Did Not Produce Any Proof Of Such Dispute Hence Ld Cit A Dismissed The Appeal Of Assessee Against The Order Of Ld Cit A Now The Assessee Is In Appeal Before Us 4 At The Time Of Hearing None Appeared On Beha Lf Of The Assessee I Took Up The Case For Adjudication After Hearing The Ld D R And Perusing The Materials On Record In This Cas E The Main Plea Of Assessee Before The Lower Authorities Is That The I Mpugned Amount Though It Was Reflected In The 26 As It Was Not Act Ually Received And Was Offered For Taxation In The Next Assessment Yea R And Tds Also Not Considered For The Assessment Year Under Consid Eration In My Opinion If The Amount Of Income As Well As Corresp Onding Tds Was Considered In The Next Assessment Year There Canno T Be Addition In Ita No 2161 Mds 2017 6 The Assessment Year Under Consideration Otherwise It Amount To Double Taxation It Shall Be Avoided Accordingly I Remit The Isuse To The File Of Ld Assessing Officer To Examine Whethe R The Assessee Has Offered The Same Income For The Next Assessment Yea R And Decide In Accordance With Law 5 In The Result The Appeal Of Assessee Is Partl Y Allowed For Statistical Purposes Order Pronounced On 05 Th December 2017 Sd Chandra Poojari Accountant Member Chennai Dated The 05 Th December 2017 K S Sundaram Copy To 1 Appellant 3 Cit A 5 0 1 23 Dr 2 Respondent 4 Cit 6 1 45 6 Gf