Assessee wins appeal as addition based solely on Form 26AS entries deleted without proper factual verification

The ITAT Surat allowed the assessee's appeal against addition made under income from other sources based on Form 26AS entries. The CPC had added the difference between interest income in Form 26AS and net interest shown in income computation. The tribunal found the assessee had properly shown bank interest under other sources and netted interest earned against interest incurred in business income. The tribunal held that additions cannot be made solely on Form 26AS basis without factual verification, as established by various tribunal benches. The addition made by AO and confirmed by CIT(A) was deleted.

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Issues involved:
The appeal challenges the adjustment made by CPC based on entries in Form No. 26AS, alleging double taxation and lack of compliance with natural justice.

Summary:
1. The assessee filed a return for A.Y. 2017-18, showing income from various sources. CPC adjusted income by Rs. 4,12,541 based on Form No. 26AS entries.
2. Assessee contended that interest income was correctly declared, expenses accounted for, and CPC adjustment lacked justification or compliance notice.
3. CIT(A) upheld the adjustment citing unexplained advances, lack of nexus, and high unsecured loan balance, leading to correct adjustment.
4. Assessee appealed to ITAT, submitting detailed written arguments and relying on case laws favoring her position.
5. Despite adjournments and absence of the assessee, ITAT reviewed submissions and CIT(A)'s order.
6. Assessee reiterated income details, CPC's mechanical adjustment, and legal precedents against adjustments based solely on Form No. 26AS.
7. ITAT found merit in the assessee's arguments, noting CPC's failure to consider the allowability of interest income and expenses, deleting the adjustment.
8. Consequently, ITAT allowed the appeal, ruling in favor of the assessee.

Separate Judgment:
The ITAT, in its decision announced on 27th September 2023, allowed the appeal of the assessee, overturning the adjustment made by CPC and CIT(A) based on entries in Form No. 26AS.

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