B.Ramakotaiah, Member (A) - (1.) THESE are cross appeals by assessee and Revenue against the order of the Commissioner of Income Tax (Appeals), Guntur dated 24 -01 -2014.
(2.) BRIEFLY stated, assessee is an individual engaged in subcontract works with KNR Constructions Ltd., Hyderabad and in the assessment made u/s. 143(3) of the Income Tax Act (Act), Assessing Officer made the following additions/disallowances: After considering the assessee's submissions, the ld. CIT(A) deleted the addition of closing balance, retention money, debit notes and difference in bank account while confirming the difference in gross receipts. Revenue is aggrieved on the deletion of closing balance of Rs. 65,36,100/ - and difference in bank account of Rs. 2,59,076/ -. Assessee is aggrieved on the confirmation of difference in gross receipts of Rs. 9,82,250/ -. These are considered after hearing the ld. DR and ld. AR and perusing the Paper Book placed on record. ITA No. 917/Hyd/2014 (Revenue's Appeal): As briefly stated, Revenue has raised two grounds on two issues. 3.1 The issue of deletion of addition of Rs. 65,36,100/ -: In the course of assessment, AO obtained account copy from M/s. KNR Constructions Ltd., Hyderabad and noticed that the outstanding credit balance as on 31 -03 -2010 in respect of the assessee was Rs. 65,36,100/ -. On comparing the Balance Sheet of assessee, Assessing Officer was of the opinion that this amount was not shown by assessee as outstanding, therefore, suppression of that amount. Assessee submitted that it has credit balances in respect of amounts receivable from KNR Constructions Ltd., Hyderabad of different works of a grand total of Rs. 78,80,176/ - which was shown as outstanding amounts in the ledger accounts. As against that, assessee has payable amounts of Rs. 72,01,276/ - towards boulder expenses payable, labour expenses payable and Mess charges payable and since these credits are available in Sundry Debtors account, only the net balance of Rs. 6,78,900/ - was shown in the Balance Sheet. Assessing Officer did not accept the submission of assessee and made the addition of Rs. 65,36,100/ -. During the appellate proceedings before the ld. CIT(A), assessee made the same submissions, furnished the copies of the Balance Sheet and other final accounts in support of the contentions. Ld. CIT(A) after perusing the submissions as well as the accounts gave a finding that amount receivable from KNR Constructions Ltd., Hyderabad at Rs. 65,36,100/ - is as per the assessee's Balance Sheet and there appears to be no omission or error. In view of this, the addition made was deleted.
(3.) LD . DR vehemently argued that this was an after thought to explain the discrepancy and the addition made by Assessing Officer is perfectly valid. He also submitted that there is no net amount payable to KNR Constructions Ltd., Hyderabad towards boulder expenses or labour expenses, therefore, assessee's explanation that only net amount was taken to Balance Sheet cannot be accepted.;