Assessing Officer fails to Cross Verify TDS details from Concerned Party: ITAT deletes Addition [Read Order]

The Income Tax Appellate Tribunal (ITAT), Kolkata has held that the Assessing Officer fails to cross verify Tax Deduction at Source (TDS) details from the concerned party and deletes addition.

During the scrutiny assessment of the appellant, M/s. Jai Balaji Industries Limited, the Assessing Officer made an addition of Rs.11,45,372/- alleging that there is a mismatch in the income received by the appellant based on the information collected from Form 26AS TDS details. The appellant filed an appeal before the first appellant authority, which confirmed the addition, and hence the appeal was preferred before the ITAT.

THE counsel for the appellant submitted that the appellant has made an advance payment of Rs.9,39,708/- to Tata Metaliks DI Pipes Limited for the purchase of scrap materials. This claim of the assessee has been rejected by the Revenue Authorities on the ground that this exact amount is not discernible from the statement of 26AS. Further, the appellant explained that in the statement of 26AS, the amount for which a bill was prepared by the concerned authority would reflect, and sometimes it is not necessary that the advance given by the assessee should match ultimately with the purchases made by it. The advance could be further adjusted for other purchases.

The Tribunal observed that the Assessing Officer keeps on making references to Bank accounts, partial payments, etc. If the Assessing Officer cross-verifies from the concerned party, Tata Metaliks DI Pipes Limited, a lot of unnecessary litigation, as well as wastage of resources, could be avoided.

The Coram of Mr. Rajpal Yadav, Vice-President (KZ), and Mr. Girish Agrawal, Accountant Member while allowing the appeal has held that without adopting that course of cross verification of details from the concerned party, the AO keeps on drawing the inference of defects in the details of the assessee by way of a deductive reasoning method. Hence, the disallowance is not sustainable.

Mr. Punit Agarwal and Smt. Ranu Biswas appeared on behalf of the appellant and respondent respectively.

To Read the full text of the Order CLICK HERE

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