Discrepancy in the accounts

Discrepancy in the accounts

On a cross verification of expenditures under various heads as available in the P&L a/c filed by the assessee with that of details available in TALLY maintained by the assessee and impounded by the ITO during survey on 10.08.2012 , it revealed various discrepancies.

An opportunity was given to the assessee to explain as to why there is a difference between the Tally and the return filed by the assessee.

The ITO stated that it is clear that the accounts maintained in tally package at the company premises is the only source from where the details could be obtained. There is no other place where the accounts are maintained as claimed by the assessee company. Returns of income is maintained in the tally package at the office premises. The survey was conducted on 10.08.2012 well after 2 to 3 years from the end of the financial years for which the accounts was already finalized and returns of income filed.

The assessee company was therefore asked to submit the vouchers / bills along with ledger for the expenditure found to be claimed in the return of income filed. The assessee filed the ledger under different heads along with vouchers.

The ITO stated that on examination it is seen that the hundred of vouchers are self made cash vouchers. The assessee company maintains cash book which it maintains regularly. A total of 1544 entries have been made in the cash book over the period of one year from 01.08.2008 to 30.03.2009. the last cash entry was made on 30.03.2009. the cash book is supposed to be maintained on daily basis. At any particular point of time, the physical cash available should tally with cash book maintained regularly.

Now the assessee comes up with an explanation that all these cash vouchers were omitted to be entered in the cash book maintained in the Tally Package which argument ITO is no accepting.

The ITO stated that it only clearly shows that in order to bring down the profit, the assessee has indulged in manipulating the accounts with excess claim of expenditures which was caught during the examination of accounts. The ITO disallows all these cash vouchers where it is found to be not reasonable but allows the expenditures wherever the payments have been made through cheque.

The following disallowance have been made under different heads.

S.N	Expenditure booked under the head	Exp. incurred as per tally	Claimed in the P&L a/c filed	Excess claim made	For self made cash vouchers not accepted	For Non production of vouchers
1	Building Maintenance	3,56,082	1,37,240	1,37,240	34,666	1,02,574
2	Clearing & Forwarding Charges	74,437	1,74,437	1,00,000	10,845	33,898
3	Computer Service	29,240	33,640	4,400	4,400	0
4	Internet Charges	5,644	45,644	40,000	7,084	0
5	Travelling Charges	56,828	3,08,057	2,51,229	0	52,771
6	Machinery Maintenance	2,61,946	5,88,449	3,269,503	14,736	1,27,279
7	Office Maintenance	44,856	2,78,526	2,33,670	0	25,845