Goldmohur Design And Apparel Park Limited Vs DCIT (ITAT Mumbai)
Form 26AS Mismatch Alone Not Conclusive: Mumbai ITAT Orders Verification to Avoid Double Taxation
The Mumbai Bench of the ITAT allowed the appeal of Goldmohur Design and Apparel Park Ltd. (AY 2018-19) for statistical purposes by setting aside additions made solely on the basis of Form 26AS mismatches and restoring the issues to the Assessing Officer for factual verification.
The additions related to interest income (₹14.39 lakh) and sale of services (₹23.07 lakh) were confirmed by the CIT(A) primarily due to lack of corroborative evidence. The Tribunal observed that the assessee had furnished reconciliation statements and credit/debit notes, explaining that the interest income had already been offered to tax in earlier years and that the service receipts represented mere reimbursement of salary costs of common managerial personnel, without any income element.
Holding that Form 26AS entries are not conclusive evidence of taxable income, the ITAT emphasized that double taxation is impermissible and that reimbursement transactions require examination of underlying agreements and accounting treatment. Accordingly, both issues were remanded to the AO with directions to verify the assessee’s claims and decide afresh after granting due opportunity.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
Aforesaid appeal filed by the assessee for Assessment Year (AY) 2018-19 arises out of the order of National Faceless Appeal Centre (NFAC), Delhi [hereinafter “CIT(A)”] dated 07.12.2024. in the matter of assessment framed Assessing Officer [hereinafter “AO”] u/s. 144 r.w.s 143(3A) & 143(3B) of the Income-tax Act, 1961 (hereinafter “the Act”) dated 02.02.2021. The assessee has raised following grounds of appeal :
“1. THE ORDER IS BAD IN LAW, ILLEGAL AND WITHOUT JURISDICTION
1.1 In the facts and the circumstances of the case, and in law, the appellate order framed by the Commissioner of Income tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, [‘Ld. CIT (A)’] is bad in law, illegal and without jurisdiction, as the same is framed in breach of the statutory provisions and as otherwise also is not in accordance with the law.
1.2 Otherwise also, in the facts and the circumstances of the case, and in law, the appellate order so framed by the Ld. CIT (A) is bad in law, illegal and void as the same is arbitrary and perverse.
2. VIOLATION OF PRINCIPLES OF NATURAL JUSTICE
2.1 The Ld. CIT (A) erred in not granting proper, sufficient and adequate opportunity of being heard to the Appellant while framing the appellate order.
2.2 It is submitted that, in the facts and the circumstances of the case, and in law. the appellate order so framed be held as bad and illegal, as:
(i) The same is framed in breach of the principles of natural justice: and
(ii) The same is passed without application of mind to the facts. WITHOUT FURTHER PREJUDICE TO THE ABOVE-
3. ADDITION OF THE AMOUNT OF RS. 14,39,701/- ON ACCOUNT OF MISMATCH OF INTEREST INCOME IN TERMS OF FORM 26AS 3.
3.1 The Ld. CIT (A) erred in confirming the action of the A.O. in making addition of the amount of Rs. 14,39,701/- on the ground of alleged difference in the amount of interest income as reflected in the accounts and as appearing in Form 26AS of the Appellant.
3.2 While doing so, the Ld. CIT (A) erred in.
(i) Basing his action on surmises, suspicion and conjecture:
(ii) Taking into account irrelevant and extraneous considerations, and
(iii) Ignoring relevant material and considerations as submitted by the Appellant.
3.3 It is submitted that in the facts and the circumstances of the case, and in law. no such addition was called for.
3.4 Without prejudice to the above, assuming but not admitting that some addition was called for, it is submitted that the computation of the addition made by the A.O. is arbitrary, excessive and not in accordance with the law.
WITHOUT FURTHER PREJUDICE TO THE ABOVE –
4. ADDITION OF THE AMOUNT OF RS. 23,07,379/- ΟΝ ACCOUNT OF MISMATCH OF SALE OF SERVICES IN TERMS OF FORM 26AS
4.1 The Ld. CIT (A) erred in confirming the action of the A.O. in making addition of the amount of Rs. 23,07.379/- on the ground of alleged difference in the amount of sale of services [revenue from operations] as reflected in the accounts and as appearing in Form 26AS of the Appellant.
4.2 While doing so, the Ld. CIT (A) erred in:
(i) Basing his action on surmises, suspicion and conjecture:
(ii) Taking into account irrelevant and extraneous considerations; and
(iii) Ignoring relevant material and considerations as submitted by the Appellant.
4.3 It is submitted that in the facts and the circumstances of the case, and in law, no such addition was called for.
4.4 Without prejudice to the above, assuming but not admitting that some addition was called for. the Ld. CIT (A) failed to appreciate that the computation of the addition made by the A.O. is arbitrary, excessive and not in accordance with the law.”
2. The assessee is engaged in the business of manufacturing readymade garments and trading in textiles. It filed its return of income for the year under consideration declaring a total income of ₹13,09,98,430/-.
