Form 26AS mismatch alone cannot sustain additions where credible reconciliation shows prior-year booking, tax-component errors, or arithmetical mistakes.

Form 26AS mismatches and TDS reconciliation cannot, by themselves, justify additions for alleged undisclosed contract receipts when the assessee provides a credible reconciliation. The appellate authority accepted that part of the receipts had already been accounted for in an earlier year, that some differences arose because tax was deducted on amounts including service tax and VAT, and that one discrepancy resulted from an arithmetical error in comparing Form 26AS with the books. On that material, the disputed amounts were not treated as unexplained or unrecorded income, and the additions were deleted.

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Issues: Whether the additions made on account of alleged undisclosed contract receipts, based on Form 26AS and TDS reconciliation, were sustainable.

Analysis: The assessee demonstrated that part of the receipts had already been accounted for in an earlier year, that some discrepancies arose because tax was deducted on amounts including service tax and VAT, and that one addition was based on an arithmetical mistake in comparing the figures from Form 26AS with the books of account. On the material placed before it, the appellate authority accepted the reconciliation and found no basis to treat the disputed amounts as unexplained or unrecorded contract receipts for the year under appeal.

Conclusion: The additions were rightly deleted and the Revenue's challenge failed.

Final Conclusion: The order of the first appellate authority deleting the impugned additions was upheld, and the Revenue's appeal was dismissed.

Ratio Decidendi: Where the assessee furnishes a credible reconciliation showing that Form 26AS figures do not represent additional income of the year, including instances of prior-year accounting, incorrect TDS deduction on tax components, or arithmetical error, no addition can be sustained merely on the basis of the Form 26AS mismatch.

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