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Roots Corporation Ltd.

2.1. The brief facts of this issue are that during the course of assessment proceedings, the ld AO had observed that AIR information was received from ITD database and the assessee was given the same to reconcile it with its books of accounts. The assessee submitted that total revenue from 141 parties as per AIR report was Rs.8,33,91,572/- whereas the amount which could be reconciled was Rs.8,12,91,668/- only thereby leading to a difference of Rs.20,99,904/-. The assessee also submitted that the data from ITD database may be incorrect or the parties may have erroneously put wrong PAN and accordingly adding the difference in the hands of the assessee would not be justified. The ld AO however held that the assessee failed to offer any explanation for the difference sum of Rs.20,99,904/- with supporting evidence and brought to tax as unexplained credit in the assessment. During the course of appellate proceedings, the assessee submitted additional evidences under Rule 46A of the Income Tax Rules which were forwarded to the ld AO for remand report. The assessee was further able to reconcile the differences to the tune of Rs.9,08,963/-. The ld AO furnished a remand report accepting to the relief of Rs.9,08,963/- and prayed for sustaining the addition of Rs.11,90,941/- before the ld CITA. Aggrieved, the assessee is in appeal before us.

Roots Corporation Ltd.

9. In view of what is discussed above, we do not find any valid reason for the Assessing Officer to make addition towards unreconciled income as the addition was solely based on AIR information and without making proper enquiries, without submitting the information as requested by the assessee. In the circumstances, we direct the Assessing Officer to delete the addition. Grounds raised by the assessee are allowed. 2.3. We find that during the year under appeal, the assessee was able to reconcile 97.48% of the total transactions reflected in ITD database and is in a much better footing than it was placed in Asst Year 2010-11 supra. In view of these facts and respectfully following the judicial precedent relied upon hereinabove, we direct the ld AO to delete the addition of Rs 11,90,941/- and grant relief to the assessee. Accordingly, the Ground No. 1 raised by the assessee is allowed.