Addition made as stop gap arrangement till TDS return revised to ascertain the true nature of the transactions set aside-ITAT

Addition made as stop gap arrangement till TDS return revised to ascertain the true nature of the transactions set aside by ITAT Kolkata in a recent judgment as under:

Case Law Details:
ITA No.2301/Kol/2013 Assessment year : 2009-10
Ashok Kumar Shaw vs. ITO
Date of Judgment/Order: 06/05/2016

Brief Facts of the Case:
The assessee appellant was a proprietor n individual dealing in iron scrap under the name and style of M/s. A. K. Steel, being a proprietorship concern. During the course of assessment proceedings the AO with the help of Form 26AS Statement noticed that the transactions made worth of Rs.12,77,000/- from M/s. L.G.Balakrishnan and Bros. Pvt. Ltd and TCS amounting to Rs. 14469/- was not disclosed by the assessee.

The assessee explained that it had disclosed each and every transactions with M/s. L.G.Balakrishnan and Bros. Pvt. Ltd and the account was squared up during the financial year 2008-09 and TCS of Rs. 14,469/- was also disclosed by the assessee in the books of account. However, the assessee in the return for A.Y.2009-10 had not claimed the TCS for the want of obtaining the TCS certificate before filing of return of income.

The AO observed that these transactions were infact taken into account, although the assessee had not claimed the credit for the TCS for want of TCS certificate. He further observed once the assessee has obtained the clarification from the said deductor and deductor agreed to revise its TDS returns so that 26AS statement does not show this income, necessary modification to the assessment shall be made in the assessment and till such time, in the interest of the revenue, this amount was added back. 

On appeal, the CIT(A) based on the remand report upheld the action of the AO.

Important Excerpts from ITAT Judgment:

We find from the assessment order that the ld. AO was not sure of framing this addition. From the language of the assessment order itself, it could be seen that this addition was made only as a stop gap arrangement till such time the deductor revises the TDS return in order to make necessary modifications in order to ascertain the true nature of the transactions. Hence we deem it fit in the facts and circumstances, in the interest of justice and fair play, to set aside this issue to the file of the ld. AO to decide this issue afresh in accordance with law. Needless to mention that the assessee be given reasonable opportunity of being heard.