The assessee, a partnership firm, disputed additions made by the AO based on Form 26AS. The assessee argued that the tax deductor made errors in reporting data, such as wrong PANs and attributing income of sister concerns. The assessee provided a reconciliation of these differences.

What were the issues?

Whether additions can be made solely based on Form 26AS data when the assessee provides a reconciliation for discrepancies caused by third-party errors.

M/S Daga Air Agents vs I.to Ward-40(3)Kol | ITAT Kolkata 2018

Q: What did the Tribunal hold?

The Tribunal restored the issue to the AO for fresh adjudication. The AO was directed to obtain information directly from the tax deductor, confront it with the assessee, and make a reconciliation before deciding the matter.

Income Tax Appellate Tribunal, BENCH ‘SMC’ KOLKATA

Before: Hon’ble Shri J.Sudhakar Reddy, AM]

ORDER PER J.SUDHAKAR REDDY, AM:

This is an appeal by the assessee directed against the order of the Commissioner of Income Tax-(A)-12, Kolkata relating to A.Y. 2012-13.

The Assessee is a partnership firm. The additions in this case, which are disputed before me, were made by the AO based on Form No.26AS filed by the tax deductor. The case of the assessee is that, it has no control over the data furnished by the tax deductor and that no addition can be made in the hands of the assesee, based on tax deduction made by a third party, particularly when the assessee is maintaining regular books of accounts and the same were not rejected by the AO. It was submitted that the tax deductors were making numerous mistakes while uploading TDS data online by (a) putting wrong PAN (b) quoting wrong name (c) bills raised by the deductee in the earlier years and accounted for in that year, is accounted for by the deductor in the subsequent year etc. The assesee gave detailed explanation as to what are the nature of mistakes made by the deductor and furnished reconciliation of the differences. The reconciliation is extracted as below :- “4. In present case assessee even filed reconciliation of difference of Rs. 10696/- (Page Nos. 4 to 9) and reasons for difference on pages No. 10-11). For example M/s Dga Air Agents A.Y.2012-13 2

(a) in good number of cases Deductor put assessee's name and deducted tax though bill was raised by a sister concern - Daga Logistics Pvt. Ltd., (b) commission income from Saraf Cargo Pvt. Ltd. Rs. 5070/- was shown by assessee in commission income and not freight and (c) interest received from UCO Bank on FDs shown by asessee in interest recd. a/c head. Items at serial Nos. 1, 2, 3, 5, 8 and 9 (serial number not given) on page nos. 10-11 relate to income of Daga Logistics Pvt. Ltd. wrongly treated as assessee's income and tax was deducted.”

In view of the above discussion and the factual scenario, I restore this issue to the file of the AO for fresh adjudication in accordance with law. The ld. AO is directed to obtain information directly from the tax deductor, confront the same to the assessee and only after making reconciliation, adjudicate the matter.

In the result the appeal of the assessee is allowed for statistical purpose.

Order pronounced in the Court on 14.03.2018.

Sd/- [ J.Sudhakar Reddy ] Accountant Member Dated : 14.03.2018. [RG Sr.PS] Copy of the order forwarded to: 1.M/s Daga Air Agents, C/o V.N.Purohit & Co., Chartered Accountants, Diamond Chambers, Unit-III, 4th Floor, Suit No.4G, 4, Chowringhee Lane, Kolkata -700016. 2. I.T.O., Ward-40 (3), Kolkata. 3. C.I.T.(A)- 12, Kolkata 4. C.I.T-14, Kolkata 5. CIT(DR), Kolkata Benches, Kolkata. True Copy By order,

Senior Private Secretary Head of Office/D.D.O, ITAT Kolkata Benches M/s Dga Air Agents A.Y.2012-13 3

M/S DAGA AIR AGENTS,KOLKATA vs. I.TO WARD-40(3)KOL, KOLKATA

What did the Tribunal hold?

What were the facts?

What were the issues?

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