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2016 (10) TMI 178 - ITAT MUMBAI

2016 (10) TMI 178 - ITAT MUMBAI - TM - Un-reconciled entries on account of non-reconciliation of AIR information - Entries in the 26AS form not accepted by the assessee - Held that:- We find that the addition has been made qua unreconciled entries appearing in the AIR information/Form No.26AS which was totally denied by the assessee that it had never any business transactions with these parties during the year. We further find that the AO has not bothered to investigate the matter further and si .....

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aised in ground No.1(b) is in respect of confirmation of ₹ 7,30,755/- for un-reconciled entries on account of non-reconciliation of AIR information and ground no 1(c) is qua non adjudication of ground raised in respect of ₹ 2,48,631/- appearing in AIR in respect of those parties with whom the assessee denied to have any business dealings. 3. Facts of the case are that the assessee filed its return of income on 28.9.2010 declaring total income at ₹ 74,92,150/- which was processe .....

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ount. However, the assessee could not explain the difference of ₹ 1,52,69,815/- the details whereof is given in para 6.1 of the assessment order and therefore the same was treated as income and accordingly added to the total income of the assessee by passing the order of assessment under section 10.12.2014 under section 143(3) assessing the total income at ₹ 2,27,61,970/- under the normal provisions of the Act and at ₹ 68,28,591/- under the provisions of section 115JB of the Ac .....

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y Diamond Trading and Consultancy Ltd was duly accounted for in the books of assessee. However, the AO stated that the assessee could not reconcile ₹ 7,30,755/- and submitted that no relief could be granted in respect of the said amount. Finally, the ld. CIT(A) allowed the appeal of the assessee partly vide para 1.3.8 of the appellate order which is as under : 1.3.8 Adverting to the facts of the appellant case, it is seen that all the basis of additional evidences and revised 26AS, it was .....

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ount in relation to Diamond Trading and Consultancy Ltd is deleted as the same stand fully justified undoubtedly, there is added in the contention of he appellant that AO should have issued notices under section 131 or under section 133(6) of the Act to verify the transaction in question after admission of the appellant that these transactions do not belong to it. However, after such a lapse of time it is also a duty of the appellant to contact the parties to clarify the position as it had done .....

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usiness transactions with those parties appearing in AIR/form26AS and any addition made on the basis of AIR information/form No.26AS were bad in law and deserved to be deleted . The ld. counsel submitted that if at all the AO had any doubts he could have issued summons under section 133(6) of the Act and should have carried out further investigation into the issue as he has all the information in his possession but instead of it he simply proceeded to add the income to the total income of the as .....

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ied on the orders of the authorities below and submitted that the addition was based on the entries as appeared in the AIR information/Form No.26AS as the assessee could not reconcile or offer any plausible explanation and prayed for the confirmation of the order of ld. CIT(A). 5. We have carefully considered the submissions of the parties, perused the material placed before us including the orders of authorities below and case laws relied upon by the parties. We find that the addition has been .....

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sue has been decided in favour of the assessee. The relevant portion of the decision is reproduced below : 6. We have considered the rival submissions and perused the material on record. The ld. DR submitted before us that the assessee was not able to re-concile the difference between the books of account with the AIR information and therefore, the addition was rightly made. Per contra, the ld. AR submitted before us that reconciliation of AIR data is not possible with the books of accounts as t .....

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8,42,51,354/- which is just 20% of the total sales of the assessee. Out of the said AIR entries the assessee had reconciled the entries amounting to ₹ 46,97,07,933/- meaning thereby that 97% of the AIR entries were reconciled by the assessee. The difference mismatch might be due to faulty return filed by the 3rd party. The ld. AR further submitted that in order to verify the un-reconciled items of AIR information, the AO has sent notice under section 133(6) to various parties on the addres .....

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