Mismatch in the amount paid to related persons u/s 40A(2)(b) reported in Audit Report and ITR

IN THE INCOME TAX APPELLATE TRIBUNAL
 KOLKATA ‘C’ BENCH, KOLKATA

 (Before Sri J. Sudhakar Reddy, Hon’ble Accountant Member & Sri Aby T. Varkey, Hon’ble Judicial Member)
 ITA No. 643/Kol/2020
 Assessment Year: 2015-16

Hill Queen Investment (P) Ltd..........Appellant
Surobala Apartments
Flat No. 202
3rd Floor
Block-B
Rekhjuani, Bhatinda
Rajarhat
Kolkata – 700 135
[PAN : AAACJ 2324 P]

Vs.

Pr. Commissioner of Income Tax -2, Kolkata.....…......Respondent

Appearances by:
Shri S.M. Surana, Advocate, appeared on behalf of the assessee.
Shri Devi Sharan Singh, CIT, D/R, appearing on behalf of the Revenue.

Date of concluding the hearing : April 6th, 2021
Date of pronouncing the order : April 21st, 2021

ORDER

Per J. Sudhakar Reddy, AM :-

This appeal filed by the assessee is directed against the order of the Learned Principal Commissioner of Income Tax (Appeals) - 2, (hereinafter the “ld. CIT(A)”), passed u/s. 263 of the Income Tax Act, 1961 (the ‘Act’), dt. 20/03/2020, for the Assessment Year 2015-16.

2. There is a delay of 223 (two hundred twenty three) days in filing of this appeal by the assessee. After perusing the petition for condonation for delay, we are convinced that the assessee was prevented by sufficient cause in filing the appeal in time. Hence, we condone the delay and admit the appeal.

3. The assessee is a company and filed its return of income for the Assessment Year 2015-16, disclosing total income of Rs.20,40,470/- on 28/09/2015. The case was selected for limited scrutiny for the following reasons:-

“(i) Mismatch in sales turnover reported in Audit Report and ITR

 (ii) Mismatch in amount paid to related persons u/s 40A(2)(b) reported in Audit Report and ITR

 (iii) Suspicious sale transaction in shares (Penny Stock tab in ITS)”

3.1. The assessment was completed u/s 143(3) on 29/12/2017, determining the total income of the assessee company at Rs.20,65,790/. The ld. Pr. CIT, Kolkata, issued a show-cause notice to the assessee on 07/01/2020, proposing to revise the assessment order passed u/s 143(3) of the Act, passed on 29//12/2017 by invoking his powers u/s 263 of the Act. The showcause notice is at page 2 & 3 of the assessment order. The assessee replied to the showcause notice. After considering the reply, the ld. Pr. CIT, at para 6 of his order, held as follows:-

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