Mismatch between contract receipts reflected in Form 26AS and Income Tax Return: ITAT directs Re-adjudication [Read Order]

The Income Tax Appellate Tribunal (ITAT) of Kolkata Bench directed readjudication due to mismatch found between contract receipts reflected in form 26AS and Income Tax Return.

Sandhya Agarwal, the taxpayer’s case was selected for scrutiny and the Assessing Officer (AO) found certain issues regarding mismatch Contract receipt and return of income.

The AO also issued notice under Section 133(6) of the Income Tax Act, 1961 to one of the parties viz Birla Corporation Ltd. To examine the issues identified. After verifying, the AO noted the mismatch between the contract receipts reflected in Form 26AS vis-à-vis reported by the assessee in its return of income. Due to this reason, the AO made an addition.

Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax Appeal (CIT(A)), who dismissed the appeal of assessee. Thus, the assessee filed a second appeal before the tribunal.

During the hearing of appeal, Siddarth Agarwal, the counsel for the assessee submitted that there was a reversal of contract receipt by one of the party viz., Birla Corporation Ltd., which had been resulted into the mismatch between contract receipts reflected in Form 26AS and the return of the assessee.

Therefore, the counsel prayed for additional evidence in terms of Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963  to substantiate the above claim and submitted an application before the tribunal in respect of confirmation from Birla Corporation Ltd. and relevant ledger in their books of account.

P. P. Barman, the Counsel for Revenue supported the decision of lower authority.

After reviewing the facts and submission, the two-member bench of the tribunal comprising Girish Agrawal (Accountant Member) and Sanjay Garg (Judicial Member) observed that confirmation letter from Birla Corporation Ltd. along with ledger account from their books of account which demonstrates the reversal of the contract receipts as claimed by the assessee has not been considered by the authorities below.

Thus, the bench took this additional evidence on record and remitted the matter back to the file of AO for verification of these documents in respect of difference in contract receipts reflected in Form 26AS and that reported in the income-tax return.

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