INCOME TAX ACT, 1961

Section 143(3)

Assessment - Addition to income - Alleged understatement of debtors - No dispute as to figures of sales

Assessee, a private company, was engaged in carrying out business of execution of turnkey jobs/projects of water supply schemes awarded by various Governments/ Governments Undertaking. AO noticed that during the year under consideration, assessee undertook 30 projects but debtors were reflected in only some of the projects. According to AO, debtors as shown in project wise details submitted by assessee were not tallying with assessee's books of account. Accordingly, AO made addition on account of suppression of debtors.Held: Entire turnover of assessee was exclusively from Government Department and said turnover was not disputed by AO had also not considered debtors of other divisions and only considered debtors of contracting division. As a matter of practice, no Government Department issues any confirmation, an issue which had been raised by AO. AO just made an estimated calculation and actual figures of various deductions such as TDS, Works Contract Tax, Security Deposit, royalty, Secured Advances (EMD), and Retention money had not been considered. When AO was accepting turnover, sales were not disputed and had also not considered actual figure of various deductions as afore-stated, in such scenario addition made by AO could not be sustained.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2010-11

INCOME TAX ACT, 1961

Section 143(3)

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