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Facts
The assessee appealed against the CIT(A)'s order concerning additions made by the AO related to differences in sundry creditors and discrepancies between Form 26AS and ITR receipts. The AO made additions for both issues.
Held
The Tribunal held that the CIT(A) misconstrued facts regarding sundry creditors and set aside the addition, allowing the first issue. Regarding the second issue, the Tribunal found the assessee explained most of the difference between 26AS and ITR, and directed the AO to make a revised addition.
Key Issues
Whether the additions made by the AO on account of differences in sundry creditors and between Form 26AS and ITR receipts are justified, and if not, to what extent?
Sections Cited
143(3), 26AS
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Income Tax Appellate Tribunal, “B” BENCH, KOLKATA
This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 24.06.2025 for the AY 2014-15.
The assessee has raised two effective issues in the various grounds of appeal.
3. The first issue is against the order of ld. CIT (A) restricting the addition to ₹14,54,029/- as against the addition made by the ld. AO of ₹89,89,366/- on account of difference between the sundry creditors as on 31.03.2013, vis-à-vis 31.03.2014.
3.2. In the appellate proceedings, the ld. CIT (A) deleted the said addition after taking into account the submissions and contentions of the assessee. However the ld CIT(A) has gone a step further and made an addition of ₹14,54,029/- by holding that the sundry creditors as per the audited Balance Sheet for A.Y. 2014-15, were ₹19,00,89,296/- whereas in the return of income, the appellant has shown sundry creditors of ₹19,15,43,325/- and hence, there is a different of ₹14,54,029/-. The ld. CIT (A) page no.9 of the appellate order extracted both the relevant part of the ITR as well as the balance sheet and compared the figures. Thus, the ld. CIT (A) partly allowed the appeal.
3.3. After hearing the rival contentions and perusing the materials available on record, we find that the ld. CIT (A) totally misconstrued the facts as per the return of income as well as the balance sheet of the assessee. We note that in the balance sheet the total current liabilities were shown at ₹19,15,43,325/-. The breakup thereto is as under:-
“God Account 101, Sundry Creditors 19,00,89,296/-, Provision for outstanding liabilities of ₹14,53,938/-, total ₹19,15,43,325/-.
The second issue raised by the assessee is against the order of ld. CIT (A) partly allowing the appeal by restricting the addition to ₹65,94,494/- as against the total addition made by the ld. AO of ₹6,59,44,937/-, which was on account of difference between the amount shown in 26AS vis-à-vis the amount shown in ITR.
4.1. The facts in brief are that the ld. AO during the course of assessment proceedings, observed that the total receipts as per ITR were ₹18,86,22,487, whereas the amount appearing in form no.26AS was ₹25,45,67,424/-. Accordingly, the ld. AO asked the assessee to reconcile the same. The ld. AO after issuing show cause notice on 09.12.2010, added the amount of difference to the income of the assessee.
4.2. In the appellate proceedings, the ld. CIT (A) partly sustained the addition by directing the ld. AO to made the addition at the rate of 10% of the difference between the form 26AS vis-à-vis ITR.
4.3. After hearing the rival contentions and perusing the materials available on record, we find that the assessee has explained 90% of the total difference as calculated by the ld. AO on account of difference between amount of income shown in 26AS and the ITR. It was the submission of the assessee that when the assessee has explained the substantial part of difference then no addition was
In the result, the appeal of the assessee is partly allowed.
Order pronounced in the open court on 02.12.2025.