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Did you match receipts in TDS cert with books of accounts?
Did you match receipts in TDS cert with books of accounts?
Jyothi's case was picked up for scrutiny. On matching receipts in TDS certificates with books of a/cs, AO found that Jyothi has not added Rs30,46,742 to receipts. Ofcourse, AO added it back and levied penalty too. J went on appeal. Then whole series of melodrama .... happened... J's rep pleaded something and dept something else. But ultimately, case was remitted .... sent back to AO for finding out whether he added the correct amount or not.-501501
1. Jyothi was engaged in the business of a service contractor.
2. He filed his return declaring income of Rs.7,26,930.
3. During assessment proceedings under section 143(3) of the I.T. Act, the AO asked Jyothi to produce his books of account and other details.
4. A.O. compared the business receipts of Jyothi with those mentioned in the TDS certificates.
5. And found that the receipts mentioned in books were less than those in the TDS certificates. They were less by Rs.30,46,742.
6. AO asked for an explanation.
7. Jyothi said that he forgot to add it by mistake
8. AO added it back to the income.
9. And imposed the penalty Rs10,59,488 too.
10. Jyothi filed an appeal with CIT (A)
11. Jyothi's representative pleaded that Jyothi had added a part of this receipt Rs10,53,603 under miscellaneous receipts.
12. CIT(A) deleted the addition.
13. Ofcourse, penalty was also deleted.
14. Department went on appeal.
15. ITAT held that AO should see again whether the receipts were added to miscellaneous income or not?
16. ITAT also held that, the department should compute penalty on income portion (ie receipts - expenses) only and not on the entire receipts. So, the thake-points for you are
a. Match the receipts mentioned in the TDS certificates with your receipts, much before filing your tax returns. and
b. be truthful and present everything before AO only, else ITAT will remit back the case to the AO again.
And you know, it could be worse as the interest meter of AO never stops.....
The above is a description of the decision of ITAT, Hydrabad in the case "Sri Jyothi Murthy Mala vs Department of Income Tax"
