Form 26AS amounts not income if not credited in books of accounts of the assesssee. It is a well settled law that the bank account is not books of account of the assessee. Mere issue of TDS certificate does not establish any income-ITAT.
ABCAUS Case Law Citation:
1003 2016 (08) ITAT
Assessment Year: 2010-11
Date of Judgment/Order: August, 2016
Brief Facts of the Case:
The case of the appellant assessee was selected up for scrutiny under manual selection. Written replies were filed by the assessee were considered by the AO. Books of accounts were produced and test checked. Books of accounts of the assessee were accepted. However, the AO observed that there were receipts reflected in Form 26AS but assessee had not shown such receipts in his books of accounts.
The assessee explianed that the said amounts reflected against his PAN in Form 26AS statements did not relate to him. However, the Assessing Officer being not convinced with the exlanation, made a additions for the following:
Rs. 11605/- being as per TDS certificate by IndusInd Bank
Rs. 8,47,592/- being as per TDS certificate by National Insurance Company Limited and
Rs. 4,19,563/- being as per TDS certificate by Punjab National Bank as Fixed Deposit Receipt (FDR) interest
On appeal, CIT(A) dismissed it holding that the assessee could not offer any cogent explanation.
Aggrieved with the order of CIT(A), the assessee went in appeal before the Tribunal.
Contentions of the Assessee:
The assessee stated that no sum was found credited in his books of accounts. Once no sum was found credited in the books of accounts of the assesssee, any figure reflected in Form 26AS can not be treated as income of the assessee as Form 26AS does not forms part of books of accounts of the assessee.
He further stated that it is a well settled law that the bank account is not books of account of the assessee and hence, Form 26AS cannot be made a basis for the addition.
Regarding the TDS Certificate the assessee stated that the National Insurance Company had erroneously issued a TDS Certificate in his name and mere issue of TDS certificate does not establish that there is any income credited to his income as no sum is either due to him or any sum had been actually received by him.
Regarding FDR interest, it was stated that this amount was related to his wife and his minor son. It was further stated that her wife is a regular income tax assessee and both the FDRs interest and TDS claim was duly made in her return. The TDS deducted by the bank under the assessee PAN actually belonged to her and it was only a clerical mistake . Not the interest nor the benefit of TDS had been claimed by the assessee.
Observations made by the Tribunal:
The ITAT observed that the certificate from the Bank and copy of FDR showed that the interest was on account of FDRs of wife of the assessee. The FDRs interest and TDS claim was duly made in her return.
The Tribunal also opined that once no sum is credited in the books of accounts of the assesssee, any figure reflected in Form 26AS could not be treated as income of the assessee as Form 26AS does not forms part of books of accounts of the assessee.
As regards the TDS Certificate, on perusing the records, the ITAT noted that the National Insurance Company had issued a TDS Certificate in the name of the assessee but mere issue of TDS certificate does not establish that there is any income credited to the income of the assessee as no sum was either due to the assessee or any sum had been actually received by the assessee.
The Tribunal placed reliance on the judgment of ITAT, Delhi which under identical circumstances, deleted the addition made on the basis of Form 26AS holding as under:
“6. It is only elementary that information as per database of the revenue authorities cannot be, by itself, a legally sustainable basis for addition being made to the income of the assessee and that such inputs are at best starting points for appropriate inquiries. There is nothing more than these information inputs which have been put against the assessee. We have also noted that, as evident from affidavit a copy of which is placed before us at page 26 of the paper book, the assessee has categorically stated that the impugned “amount of Rs.58,78,256 shown in form No. 26AS was neither received by me nor receivable to me” and that “the above stated amount of Rs.58,78,256/- was directly paid by the Vodafone Essar Digilink Ltd to the retailers of the company, a complete list of which is provided by the company and placed on file”. We have further noted that vide letter dated 15.12.2011 (duly acknowledged by the office on 23.12.2011 – evidence placed on record at page 27 of the paper book), Vodafone, Digilink Ltd has given a complete break up of Rs.58,78,256 and given details of the retailers to whom the related payments have been made. There is no material to come to the conclusion that assessee ever received any such coupons or payments nor the same are reflected in his books of accounts or bank statements. The fact that these payments are made by coupons and vouchers etc. can also not be put against the assessee since the assessee never received the same and there is no evidence to the contrary. Apparently, entire confusion has started from the fact that, perhaps as a measure of abundant caution, Vodafone deducted tax at source in respect of the vouchers etc and, for whatever reasons, stated, the name of distributor as collective recipient of entire sum. On these facts, in our considered view, learned CIT(A) was quite justified in deleting the impugned addition of Rs.58,78,256. We approve his conclusions, and decline to interfere in the matter.”
The Tribunal deleted the additions made solely on the basis of Form 26AS Statement