AO Can’t Make Additions Merely Based on Form 26AS Without Verifying Total Contract Amount & Bills | HC

Case Details: PCIT v. MBC Infra Space (P.) Ltd. - [2023] 153 taxmann.com 108 (Gujarat)

Judiciary and Counsel Details

• • Vipul M. Pancholi & Devan M. Desai, JJ.
  • Mrs. Kalpanak Raval for the Appellant.

Facts of the Case

Assessee-company had filed its return of income for the relevant assessment year. The case of the assessee was selected for scrutiny. Thereafter, assessment under section 143(3) was completed, and additions were made to the assessee’s income on account of the difference in payment received as per Form 26AS and as per books of account.

On appeal, the CIT(A) deleted the additions made by AO, and the Tribunal confirmed further such deletion. Aggreived-AO filed an appeal before the Gujarat High Court.

High Court Held

The High Court held that the AO had not verified the assessee’s claim. The assessee raised RA Bills of Rs. 8.32 crore during the relevant financial year. The assessee received an amount of Rs. 8.32 crores, out of which, as per the books of account, as per the bank statement, is of Rs. 7.7 crores only, which was received in the current year.

There was a double deduction of TDS on the same project, which was entered into with the two different parties at the time of the bill raised and at the time of payment made on certain bills.

Thus, the CIT(A) has rightly deleted the addition after verification of the bank account contract amount, which the assessee received based on running bills. Thus, after considering the facts and circumstances of the present case, the appeal preferred by the AO was liable to be dismissed.

List of Cases Reviewed

• • Dy. CIT v. MBC Infra Space (P.) Ltd. [IT Appeal No. 675 (SRT.) of 2018, dated 1-3-2022] (para 11) affirmed.