INCOME TAX ACT, 1961

Section 199

Tax deduction at source - Credit from TDS - Addition towards difference in value of services rendered as reflected in Form No. 26AS vis-à-vis books of account -

AO observed that there was difference in service charges received as per Form No. 26AS and as per books of account of assessee. Accordingly, the assessee was asked to furnish reconciliation statement together with the corresponding TDS element thereon. She submitted reconciliation statement and stated that certain amounts that were reflected in the Form No. 26AS did not belong to her and she was not aware of those receipts. However, the AO alleged that as the assessee was following mercantile system of accounting and claimed the entire TDS as reflected in Form 26AS therefore, the amounts reflected in Form 26AS would actually represent the income of the assessee. Accordingly, the AO made addition towards difference in value of services rendered as reflected in the Form No. 26AS vis-à-vis books of account of the assessee Held: It is very well settled that the claim of TDS credit should be granted vis-à-vis corresponding income getting taxed in the relevant assessment year. Further, assessee furnished a detailed reconciliation statement party wise mentioning the total receipts vis-à-vis the corresponding TDS thereon and as per the reconciliation statement, there were some parties with whom no receipts had been shown by the assessee in her income tax return, but reflected in Form 26AS together with the TDS thereon. Accordingly, the matter was remanded to the AO for de novo adjudication in accordance with law by making corresponding cross-verification with the concerned parties to ascertain the fact whether at all any services were indeed rendered and completed during the year under consideration by the assessee so as to bring to tax the corresponding service charge income thereon together with its TDS.

REFERRED :

FAVOUR : Matter remanded

A.Y. :

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