2020 (5) TMI 162 - AT - Income Tax

Addition made towards the difference in the value of services rendered as reflected in Form No.26AS vis- -vis books of account of assessee - HELD THAT - The law is very well settled that the claim of TDS credit should be granted vis- -vis corresponding income getting taxed in the relevant assessment year. Considering the fact that the assessee had furnished a detailed reconciliation statement party wise mentioning the total receipts vis- -vis the corresponding TDS thereon and as per the reconciliation statement. There are some parties with whom no receipts have been shown by the assessee in her income tax return, but reflected in Form 26As of the assessee together with TDS thereon, we deem it fit and appropriate, in the interest of justice and fair play, to remit the issue to the file of Ld. A.O. for denovo adjudication in accordance with law by making corresponding cross-verification with the concerned parties to ascertain the fact whether at all any services were indeed rendered and completed during the year under consideration by the assessee so as to bring to tax the corresponding service charge income thereon together with its TDS. Grounds raised by the assessee are allowed for statistical purposes.

Summary

Issues:
Determining the justification of upholding the addition made towards the difference in the value of services rendered as reflected in Form No.26AS vis-à-vis books of account of the assessee for the assessment year 2014-15.

Detailed Analysis:

Issue: Justification of Addition towards Difference in Service Charges
The appeal was filed against the order of the Commissioner of Income Tax (Appeals) for the assessment year 2014-15. The primary issue in the appeal was whether the CIT(A) was correct in upholding the addition made towards the difference in the value of services rendered as per Form No.26AS compared to the books of account of the assessee. The assessee, engaged in maintenance services, had discrepancies in receipts shown in the return and Form No.26AS. The Assessing Officer (A.O.) brought to tax a sum towards service charges and interest income, which the assessee contested. The CIT(A) upheld the addition towards service charges. However, the Appellate Tribunal found that the reconciliation statement submitted by the assessee was not properly appreciated. The Tribunal noted that TDS credit should correspond to the income taxed. Since discrepancies existed where some parties' receipts were reflected in Form 26AS but not in the income tax return, the Tribunal remitted the issue back to the A.O. for further investigation to determine if services were actually rendered, and the income should be taxed accordingly.

Conclusion:
The Tribunal allowed the appeal for statistical purposes, remitting the issue back to the A.O. for denovo adjudication. The decision was made in the interest of justice and fair play to ensure proper verification of the services rendered and corresponding income for the assessment year 2014-15.