The Mumbai branch of the ITAT decided to partially support a plea after finding that there was a difference between the income declared in the 26AS Form and the actual income obtained. They supposed that this problem required further research to clarify the facts.
The taxpayer, Dattani Construction, a partnership firm, is in real estate development, and had filed its return declaring income of ₹4,64,557 for Assessment Year 2011–12.
The Assessing Officer (AO) in the scrutiny stated that Form 26AS showed rent and interest receipts aggregating to ₹10,48,326, along with Tax Deducted at Source (TDS) of ₹1,04,834, whereas the taxpayer had declared only ₹6,42,499 as income.
AO carried that as the entire TDS credit was claimed, therefore the taxpayer must declare the related gross receipts, and considered the balance of Rs 4,05,826, which includes rent of ₹3,82,492 and interest of ₹23,334 as undisclosed income, making the addition.
Before the CIT(A), the taxpayer said that, aside from the rent of ₹6,00,000 received from Selvel Publicity, no rent was collected from Kavveri Telecom Infrastructure Ltd. Additionally, no interest was received from Aditi Fastfood Pvt. Ltd. The taxpayer noted that only the TDS component, which had been mistakenly credited to its PAN, was reported.
Taxpayer, the entries in 26AS did not compare to real income. The CIT(A) rejected the contention, citing that the taxpayer is unable to establish who actually received the amounts related to the TDS claims and upheld the addition.
The taxpayer before the Tribunal repeated that merely the TDS amounts were shown and not the actual receipts, and that the mismatch was due to deductors uploading details in their TDS returns against the PAN of the taxpayer.
The Bench, including Om Prakash Kant (Accountant Member) and Raj Kumar Chauhan (Judicial Member), stated that whether the taxpayer actually obtained the rental and interest amounts specified in Form 26AS was a pure case of factual verification.
The Tribunal held that the AO is required to confirm whether the deductors actually paid or credited the rent/interest to the taxpayer, they claimed such expenditure in their books of account, and only the TDS amount was settled between the parties.
Also, the tribunal asked that if the taxpayer does not get any amount other than the TDS, the Assessing Officer (AO) needs to grant precise TDS credit post accounting for the income received.
Hence, the Tribunal set aside the addition, restoring the case to the AO for fresh adjudication with particular directions for verification and after furnishing the taxpayer a chance of being heard. Subsequently, the appeal has been permitted for statistical purposes. Prateek Jain appeared for the taxpayer, and for the Revenue, Annavaram Kasuri appeared.
| Case Title | Dattani Construction vs. ITO |
| Case No. | ITA No. 2107/MUM/2025 |
| For Petitioner | Mr Prateek Jain |
| For Respondent | Mr Annavaram Kasuri |
| Mumbai ITAT | Read Order |
