D.B.C. SONS ( GUJRAT) PVT. LTD,MUMBAI vs. DCIT 1(1), MUMBAI

I heard the parties and perused the record. The assessee is engaged in the business of stevedoring, Clearing & forwarding and steamer agency. The AO noticed that there was a difference of Rs.92,372/- between the receipts accounted for in the books of account and that reported in AS-26 data. Hence the AO added the difference to the total income of the assessee. The assessee accepted part of addition, but disputed addition of Rs.83,052/- on the reasoning that its books of accounts are correct and the mistake might have been committed by the payer of income. The Ld CIT(A) did not agree with the same and accordingly confirmed the addition.

I notice that the difference of RS.83,052/- relates to the amounts received from a party named M/s APL (India) P Ltd. I further notice that the assessee has furnished the ledger account copy of that party and the details of bank advices to prove the quantum of amount received from the above said party. Further, the assessee has also written a letter to the above said party with a request to reconcile the difference, but it did not receive any reply. I further notice that the assessee has brought these facts to the notice of the AO, but the AO did not exercise his power to call for information from the above said party. Under these set of facts, I am of the view that the ld CIT(A) was not justified in confirming the addition made by the AO, as the assessee has taken his best efforts to prove that the entries made in its books of account were correct.

I notice that identical addition made by the AO in AY 2012-13 has been deleted by Ld CIT(A), vide its order dated 13-02-2017, by following the decision rendered by the division bench of ITAT in the case of Shri S Ganesh (ITA No.527/Mum/2010 dated 08-12-2010). In the above said case, the Tribunal deleted the identical addition on the reasoning that the assessee therein had accounted all the receipts in one bank account.

Before me, the Ld A.R also placed reliance on the decision rendered by Mumbai bench of Tribunal in the case of M/s ANS Law Associates Vs. ACIT (ITA No.5181/M/2012 dated 05-12-2014). In the above said case, the Tribunal has observed that the additions cannot be made solely on the basis of AIR information. The Tribunal took support of the decision rendered by Bangalore bench of Tribunal in the case of DCIT Vs.Shree G Selva Kumar (ITA No.868/Bang/2009 dated 22.10.10) and Aarti Raman Vs. DCIT (ITA No.245/Bang/2012 dated 05-10-12). However, since both the parties agreed for restoration of the matter to the file of AO, the Tribunal restored the matter to the file of assessing officer.

In the instant case, I noticed that the assessee has discharged the onus placed upon it by making necessary enquiries and furnishing all the available information. It has also brought to the notice of the AO that the payer is not forthcoming with actual details. In that situation, the Assessing Officer should have caused enquiries by using his powers given under the Act. In the absence of any such enquiries, I am of the view that the addition made by the AO cannot be sustained. Accordingly I set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the impugned addition.

In the result, the appeal of the assessee is allowed. Order has been pronounced in the Court on 2.11.2017.