By Jagdish D. Shah, Jagdish T. Punjabi Chartered Accountants
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Section 285BA – Additions made solely on the basis of AIR information are not sustainable.
Facts:
The assessee is a registered partnership firm of advocates and solicitors. The AIR information showed that the assessee had received professional/technical fees from various persons aggregating to Rs.1.39 crore, which the AO required the assessee to reconcile. The assessee reconciled major portion of the amount, but could not reconcile the amount of Rs. 4.49 lakh allegedly received from one party viz., Allied Digital Services Ltd. The assessee stated before the AO that it had never received above amount. But the AO did not agree and made the addition of Rs. 4.49 lakh to the income of the assessee. In the appeal before the CIT(A), the assessee submitted bank statements of all its accounts. It was further submitted that only Rs.1 lakh was received during the year under consideration from Allied Digital Services Ltd.and a confirmation from the said party in this respect was also filed. The CIT(A),however, held that since the assessee had failed to reconcile the receipts from Allied Digital Services Ltd., the AO was justified in making the addition. According to him, the confirmation of Rs.1 lakh did not tally with the dates of receipts mentioned in the AIR information.
Held:
The Tribunal noted that the assessee had received only Rs.1 lakh from Allied Digital Services Ltd., for which there was no reference in the AIR information. Relying on the decision of the Tribunal in the case of DCIT vs. Shree G. Selva Kumar (ITA No.868/Bang/2009 decided on 22.10.10) and in the case of Aarti Raman vs. DCIT (ITA No.245/Bang/2012 decided on 05.10.12), it observed that time and again, it has been held that the additions madesolely on the basis of AIR information are not sustainable in the eyes of the 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 theassessee cannot prove the negative. Accordingly, the matter was restored to the file of the AO.
