AO cannot Suspect Genuineness of Parties Once TDS Element is Reflected in Form 26AS: ITAT [Read Order]

The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) has held that the Assessing Officer cannot reject the genuineness of the parties once the TDS element is reflected in the form 26AS during the income tax proceedings.

The assessee, M/s Globus Realcom Pvt Ltd, is engaged in the business of real estate. During the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has claimed large sales promotion expenses in its profit and loss account. Therefore, the assessee was asked to produce the details regarding large sales promotion expenses.The assessee did not furnish complete details. The department asked the assessee to produce entire details with regard to large sales promotion expenses. The assessee was also asked to give details party-wise that per party how many flats were booked and how much payment was made for booking flat with documentary evidences and to justify the claim of such large sales promotion expenses amounting to Rs. 1,03,94,138/-.

Shri N.K. Billaiya, Accountant Member, and Shri Kul Bharat, Judicial Member found that the “confirmation of accounts from M/s Mathur Associates and The Transaction Point clearly show that in addition to commission, there is an element of Service Tax mentioned in the account and the allegation of the Assessing Officer that the amount confirmed by the parties differ from the amount claimed by the assessee does not hold any water in as much as the difference is because of the Service Tax.”

Considering the fact thatthe transaction wherein complete details have been furnished alongwith TDS details, the ITAT held that “once TDS element is reflected in Form No. 26AS, the Assessing Officer cannot allege that the parties are not genuine. Moreover, full details are available on record. Therefore, we do not find any reason in sustaining the disallowance. Findings of the ld. CIT(A) are set aside and the Assessing Officer is directed to delete the impugned disallowance.”

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates