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2017 (9) TMI 1216 - AT - Income TaxAddition on account of alleged suppression of service value received - Held that:- Admittedly, the assessee’s books of account are audited and the AO could not find any discrepancy in the same. Merely because the 26AS when compared with the service value as reflected in the P&L Account of the assessee cannot be the ground to make the addition. In such cases, we should take note that the assessee has no control over the Form 26AS which is generated by the department when the payer credits the tax deducted at source electronically by entering the PAN details of the assessee, where mistake during entering the PAN details or figures cannot be ruled out. The assessee maintained its books of account in the regular business which is audited and has received its receipts through banking channel. In such a scenario, in order to disbelieve the assessee’s P&L Account when there is discrepancy with Form 26AS, then it is the bounden duty of the AO to give opportunity to the assessee to confront the payer and to find out the correct figure, without doing so, the addition made simply believing the Form 26AS will be an arbitrary exercise of power which cannot be sustained and, therefore, we direct deletion of the same. This ground of appeal of assessee is allowed. Disallowance of 20% of the site expenses - Held that:- Before the AO, the assessee produced internal vouchers and bills wherever it could get the bills that was produced; and of course the office vouchers were produced before the AO. However, the AO has disallowed 20% holding that expenses may not be bona fide and genuine. We do not subscribe to such action of the authorities below on the facts and circumstances of the case as discussed above. The ad-hoc disallowance of 20% is akin to arbitrariness and based on surmises and conjectures without spelling out the defects in the vouchers and books produced before him. The books of account of the assessee are audited and the AO has not found any default with the books of account. If there was any item-wise defect noticed by the AO, then he should have disallowed the said item-wise disallowance but not ad-hoc disallowance which cannot stand under scrutiny of law and, therefore, we are inclined to allow this ground of appeal of the assessee.
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