D M Estates Private Limited Vs DCIT (ITAT Bangalore)
The appeal before the Bangalore Bench of the Income Tax Appellate Tribunal arose from an order of the Commissioner of Income Tax (Appeals) sustaining an addition made for Assessment Year 2014–15. The assessee, a company engaged in construction and property development, had declared total income of ₹99,80,689. During assessment, the Assessing Officer (AO) compared rental facility income disclosed in the books with figures reflected in Form 26AS and noticed discrepancies in respect of seven customers. While the books showed lower receipts, Form 26AS reflected higher amounts. The aggregate difference amounted to ₹5,98,398, which the AO treated as undisclosed income and added to the total income.
The assessee explained that its books were regularly maintained, duly audited, and supported by lease agreements, with all receipts routed through banking channels. It was contended that Form 26AS figures included gross amounts reported by customers, in some cases inclusive of service tax and amounts relating to other services. In contrast, the books recorded net facility income, with income from other services disclosed separately under miscellaneous income. The assessee also pointed out that out of 29 customers, discrepancies were noticed only in seven, while total facility income exceeded ₹5.49 crore, making intentional suppression of a small amount improbable. It was further argued that the assessee had no control over the data reported by customers in Form 26AS and relied on the decision of the Mumbai Bench in TUV India Pvt. Ltd., where additions based solely on Form 26AS mismatches were held to be unsustainable.
