By JAGDISH T. PUNJABI I DEVENDRA JAIN I TEJASWINI GHAG
Chartered Accountants
Section 4 read with section 133(6) – In the
absence of any material on record to show that the assessee has received amount
more than the income which had been declared by it in the P&L a/c, addition
cannot be made solely based on AIR information, especially when the assessee
requested the AO to examine the parties by issuing notice u/s. 133(6) but AO
failed to make any enquiry.
FACTS
The AO in the course of the assessment proceedings, on
perusal of the AIR data found that there was a discrepancy in income to the
extent of Rs.14,13,908 in Form 26AS and the books of account.
The assessee submitted that the transactions in respect of
the discrepancy did not happen and were not related to the assessee. The
assesse also filed before the AO a rectification application under section- 154
requesting for withdrawal of corresponding TDS credit.
It was submitted before the AO that these transactions did
not appear in the books of account of the assessee and the bank account also
did not reflect any receipts from these parties. The assessee requested the AO
to verify the books of account and also to examine the parties by issuing the
notices under section 133(6).
However, the AO treated the said amount as income of the
assessee for the reason that assessee claimed TDS on such transactions but
denied owning up of the said transactions.
Aggrieved by the assessment order, the assessee filed appeal
before CIT(A) but the addition was sustained by the CIT(A).
HELD
The Tribunal stated that in the absence of any material
brought by the revenue authorities that the assessee had received amount more
than the professional fees which had been declared by him in the P&L
account and when the professional income declared by the assessee far exceeded
the professional fees shown in the AIR information, the additions solely based
on the AIR information were not sustainable.
The AO also failed to make any enquiries with the parties as
requested by the assesse when the assessee had denied any transactions with
them. When the assessee had denied any transactions with the parties, the onus
was on the AO to verify the transactions with the parties and to establish that
the assesse indeed entered into any transactions with the said parties and had
received income from them. No such enquiries or effort was made by the AO.
The addition was made solely based on the AIR information
without bringing any cogent evidence on record to suggest that the assessee
received income from the said parties.
In the result, the Tribunal reversed the order of the CIT(A)
and directed the AO to delete the addition made on account of alleged
difference in income.
