DCIT Vs Honeywell Automation India Pvt. Ltd. (ITAT Pune)
The Revenue appealed against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] for Assessment Year 2016-17, challenging the deletion of an addition of Rs. 8,45,53,050 made by the Assessing Officer (AO) on account of differences between receipts reflected in Form 26AS and the assessee’s books of account.
The assessee, engaged in the automation and control industry, filed its original and revised income tax returns declaring its income. During scrutiny assessment, the AO directed the assessee to reconcile receipts reflected in Form 26AS with those recorded in its books of account.
The assessee explained that the total revenue as per its Profit and Loss Account was higher than the income appearing in Form 26AS, and therefore no addition to the returned income was warranted. It relied on a Mumbai ITAT decision holding that additions based solely on AIR information were unsustainable where the declared receipts exceeded the information available. The assessee further submitted that differences between Form 26AS and its books arose due to several reasons, including credit notes, opening unbilled revenue, timing differences in recording invoices by customers and the assessee, inadvertent reporting errors by customers, and TDS deductions on service tax and works contract tax components. It also highlighted that, when all customers were considered together, revenue recorded in the books exceeded the receipts reflected in Form 26AS.
