The two member bench of the Income Tax Appellate Tribunal ( ITAT ), Ahmedabad has set aside the Commissioner of Income Tax (Appeals) order, finding that the discrepancy between Form 26AS and the books of accounts was due to a typographical error in the receipts.
The assessee, Bankers Cardiology Pvt. Ltd. Company, engaged in hospital operations, filed its income tax return on 30th September 2015, reporting a total income of Rs.6,31,35,810/-. The case was selected for scrutiny, leading to an assessment order under Section 143(3) of the Income Tax Act, 1961, dated 20th December 2017. The assessment order included various additions amounting to Rs.63,19,416/-.
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Among the additions, the Assessing Officer (AO) made an addition of Rs.14, 08,008/- on account of an alleged short credit of receipts as per Form No. 26AS compared to the books of accounts. The AO observed a discrepancy between the amounts reported in Form No. 26AS and the assessee’s books concerning receipts from United India Insurance Corporation Ltd. (UIICL). Form No. 26AS reflected receipts of Rs.15,62,530/-, whereas the books showed Rs.1,58,052/-. Consequently, the AO added the discrepancy amount of Rs.14,04,478/- to the income of the assessee.
The assessee appealed to the CIT (A), who allowed a partial relief by deleting an amount of Rs.3, 530/- but sustained the addition of Rs.14,04,478/-. The assessee contended that the discrepancy was due to a typographical error in the reconciliation statement submitted during the assessment proceedings. The actual amount received from UIICL was Rs.15,98,052/-, correctly recorded in the books, but the reconciliation statement erroneously showed Rs.1,58,052/-. Despite acknowledging this explanation, the CIT(A) was not persuaded and upheld the addition.
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During the hearing, Mr. Rasesh Shah, representing the assessee, clarified that the amount received from UIICL pertained to Mediclaim payments and had already been credited to the profit and loss account. He presented a ledger account of UIICL, which aligned with Form No. 26AS, and further explained the typographical error in the reconciliation statement. It was noted that additional evidence, including ledger accounts of UIICL, charts of insurance amounts sanctioned for patients, and related bills, had not been submitted to the AO or CIT(A).
The Tribunal, consisting of members T.R. Senthil Kumar and Makarand Mhadeokar (Accountant Member), acknowledged the potential merit of the additional evidence. Given its significance, the Tribunal decided to set aside the CIT (A)’s order and remand the case to the CIT(A) for fresh adjudication. The CIT (A) is instructed to review the additional evidence, provide a reasonable opportunity for the assessee to be heard, and then pass a revised order. Accordingly, the appeal was allowed for statistical purposes.
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