INCOME TAX ACT, 1961

Section 143(3)

Assessment addition to income - Addition on account of difference between income reflected in Form 26AS and income reflected in books of account - -

Assessee-company was engaged in business of construction and property development. AO noticed that 'Rental Facility Income' derived by the assessee, as reflected in Form 26AS was more that the amount reflected in its books of account. Assessee submitted that books of account were duly audited and the entire income was correctly disclosed in the return. It was also submitted that the 'Rental Facility Income' was supported by lease agreements and the payments were received by cheques and that there was no omission whatsoever. However, AO rejected the submissions of the assessee and made addition on account of difference in receipts as per books of accounts and as per Form 26AS. Held: No defect was pointed out by Revenue in books of account of assessee. Further, there could be differences in accounting policy followed by the assessee and its clients or the clients might have committed a mistake while furnishing the information to the Revenue. Further, one of the reasons for difference could be that the clients deducted TDS on gross amount inclusive of service tax while the income reflected by the assessee was exclusive of service tax. Further, the assessee had no control over the database of the Revenue as reflected in Form No. 26AS and at best the assessee could do was to offer bona fide explanations for the differential, which the assessee did in the instant case. Hence, no addition was warranted in the hands of the assessee owing to differential in income based on Form No. 26AS and the income reflected in the books of account of the assessee.

Relied:TUV India Pvt. Ltd. & Anr. v. DCIT (2019) 179 ITD 238 (Mum. -Trib.): 2019 TaxPub(DT) 5303 (Mum-Trib)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2014-15

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