Case Law Details
The facts in brief are that the Assessing Officer (hereinafter referred to as the AO) noted that the AIR information showed professional receipts of 34,49,43,172/- by the assessee which were required to be reconciled with the books of accounts. The assessee reconciled major portion of the amount but could not reconcile the amount of Rs.2,32,75,363/-. It was stated by the assessee that these receipts were not received by the assessee. However, the AO observed that since the assessee had failed to reconcile the above stated receipts, he treated the same as concealed income of the assessee and added the same to the total income of the assessee.
During the appellate proceedings before the ld. CIT(A), the assessee filed some additional reconciliation statements as additional
evidence. The matter was remanded to the AO. The assessee further reconciled the receipts amounting to Rs.74,41 ,057/- out of total unreconciled amount of Rs.2,32,75,363/- as per AIR information. It was submitted by the assessee before the ld. CIT(A) that the AIR information did not provide full details of the parties, hence it was difficult for the assessee to reconcile the same. It was also submitted that professional receipts were received by the assessee only through banking channel and were duly recorded in the books of accounts and Offered to tax, hence there was no undisclosed income. However, the ld. CIT(A) rejected the contentions of the assessee and confirmed the addition of the remaining unreconciled professional receipts of Rs. 1,58,34,306/-.
Before us, the ld. A.R. of the assessee has submitted that all the professional fees were received by the assessee through banking channels only and all the receipts were duly recorded in the books of accounts and there was no undisclosed income of the assessee. He has further submitted that the professional fees shown, as per AIR information, was Rs.40,02,84,680/- whereas professional fees disclosed in the P&L account and offered for tax was Rs.50,36,03,971/- which was much higher than the professional fees shown in the AIR information. He has further submitted that out of the professional receipt of Rs.40,02,84,680/- as shown in the AIR information, the assessee had reconciled the professional receipts to the extent of 37,70,09,317/- before the AO. Further, during the appellate proceedings before the ld. CIT(A), the assessee had reconciled a sum of Rs.74 lakh. In the AIR information the full details of the parties were not mentioned and as such it was not possible for the assessee to produce further reconciliation.
On the other hand, the ld. D.R. has relied upon the findings of the lower authorities.
We have considered the rival contentions of the ld. representatives of the It is an undisputed fact on the file that the professional fees shown by the assessee in its P&L account far exceeds than the amount shown in the AIR information. Even the assessee has reconciled the major portion of the receipts. It has not been denied by the Revenue Authorities that full and complete details of the parties are not mentioned in the AIR information. The addition in this case has been made by the lower authorities solely on the basis of AIR information. In our view, the addition, made solely on the basis of AIR information, especially in the absence of full details of parties and when the professional receipts declared by the assessee far exceeds than the amount mentioned in the AIR information, is not sustainable in the eyes of law. Our above view is fortified with the decision of the Bangalore Bench of the Tribunal in the case of “DCIT vs. Shree G. Selva Kumar” in ITA No.868/Bang/2009 decided on 22.10.10 and another in the case of “Aarti Raman vs. DCIT” in ITA No .245/Bang/1 2 decided on 05.10.12 wherein it has been held that the assessment order based only on the AIR information would not stand in the eyes of law. If the assessee denies that he is in receipt of income from a particular source, it is for the AO to prove that the assessee has received income as the assessee cannot prove the negative. Reliance can also be placed on the decision of Mumbai Bench of Tribunal in the case of Shri S. Ganesh vs. ACIT” in ITA No.527/M/2010 decided on 08.12.10 wherein the Tribunal has held that in the absence of any material brought by the revenue authorities that the assessee has received amount more than the professional fees which has been declared by him in the P&L account and when the professional income declared by the assessee far exceeds the professional fees shown in the AIR information, then additions solely based on the AIR information are not sustainable.
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