Addition due to mismatch in 26AS and in books of account unsustained as difference duly explained

DCIT Vs Connect Residuary Pvt Ltd (ITAT Mumbai)

ITAT Mumbai held that addition on account of mismatch between the income reported under form number 26AS and the income recorded in the books of accounts unsustainable since the mis-match duly explained.

Facts-The assessee is engaged in the business of equipment renting based on Residual management capabilities. The assessment order u/s. 143(3) of the act was passed, determining total income at ₹ 373,792,940/-. Substantial addition was made on account of mismatch between the income reported under form number 26AS and the income recorded in the books of accounts. Form No. 26 AS showed huge Rental income on which TDS is made and claimed as tax Credit by the assessee, and the assessee’s financial statements did not show any rental income.

During the course of assessment proceedings, it was found that the assessee has claimed tax deduction at source, whereas AO was of the view that the assessee has offered income tax, which is attributable to tax deducted at source.

AO disbelieved explanation of assessee and found that receipt stated in form number 26AS and income shown in the profit and loss account has wide variances and therefore he made an addition of ₹ 37,86,70,325/–.

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