TaxTMI 
TaxTMI 
2026 (9) TMI 1833
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....25 and in ITA No.1644/Chny/2025 and the revenue explained the reasons for delay in filing the appeals. The revenue has filed affidavits stating the reasons for delay in filing the appeals is due to 'cases having time barring date for completion of pending assessment on 31.03.2025 were to be completed and to trace the miscellaneous records of the case took some time'. Hence, the appeals could not be filed before the limitation period. After considering the affidavits filed by the revenue and also hearing both the parties, we find that there is a reasonable cause for the revenue in not filing appeals on or before the due date prescribed under the law and thus, in the interests of justice, we condone delay in filing of appeals and admit the appeals filed by the revenue for adjudication. 3. The brief facts of the relevant assessment years are as under: 3.1 A.Y. 2015-16: The brief facts emanating from the records are that the assessee is a HUF, engaged in the business of Renting out properties and also received interest income. The AO had reopened assessment for the A.Y.2015-16, u/s. 147 of the Act and issued a Notice dated 30.03.2021 u/s. 148 of the Act. The assessee filed its....
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.... Rs.7,63,81,708/- 2) Cash Deposits in Kotak Mahindra Bank A/c No 737010042783 Rs. 29,05,000/- 3) Total Credits in IDBI Bank A/c. No0028104000324564 Rs.9,61,19,571/- 4) Total Credits in IDBI Bank A/c. No. 0887104000072690 Rs. 6,25,205/- TOTAL Rs. 17,60,31,484/- Aggrieved by the above assessment order u/s. 143(3) r.w.s 147 of the Act, the assessee preferred an appeal before the Ld.CIT(A), Chennai. The Ld.CIT(A) passed an order dated 20.03.2025 by allowing the appeal of the assessee partly and sustained the following additions: * Unexplained credits u/s. 69A in Kotak Mahindra Bank (account No.737010042783) Rs.6,27,05,000/- * Unexplained credits u/s 69A in IDBI Bank (account No. 0028104000324564) Rs.7,04,50,000/- * Unexplained credits u/s 69A in IDBI Bank (account No. 0887104000072690) Rs. 6,25,000/- 3.3 A.Y.2017-18 The assessee had not filed the Return of Income and hence, the AO had reopened assessment u/s. 147 of the Act and issued a Notice dated 30.03.2021 u/s. 148 of the Act for the A.Y. 2017-18. The assessee filed the Return of Income on 11.12.2021 in response to notice u/s. 148 of the Act admitting a total in....
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....g the email Id mentioned in the details submitted by the assessee in the efiling portal. 3. The assessment order does not contain any Document Identification Number (DIN) which is null and void. In the present case of the assessee DIN had been generated on 31.03.2022 and then the Assessment order u/s. 147 of the Act dated 31.03.2022 was uploaded in ITBA through manual order upload functionality. But the DIN was omitted to be mentioned in the assessment order. The DIN has been communicated to the assessee post the date of assessment order on 05.04.2022 which has been uploaded in ITBA manually. The same has been accepted by the assessing officer vide the remand report being issued on 12.11.2024. 5. The assessee also raised the following grounds of appeal on merits in respect of each A.Ys. separately: 5.1 ITA 991/CHNY/2025 - A.Y. 2015-16 a) Addition amount sustained by the Hon'ble CIT(A) amounting to Rs. 15,79,800/- as unexplained credits is incorrect and bad-in-law. b) Hon'ble CIT(A) erred in considering Advance rental receipts as rental income for the year under consideration amounting to Rs. 1,30,18,054/- c) The Hon'ble CIT(A) erred in enha....
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.... appeal raised as detailed below: 7. ITA NO.991/CHNY/2025 - A.Y. 2015-16 - Assessee's Appeal : a) Addition amount sustained by the Hon'ble CIT(A) amounting to Rs. 15,79,800/- as unexplained credits is incorrect and bad-in-law: In this regard the ld.AR submitted that for the year under consideration the AO vide order dt. 31.02.2022 has made addition amounting to Rs. 2,03,41,810/- as unexplained rental income of the assessee. The ld.AR submitted that during the scrutiny proceedings the assessee has submitted two annexures which contain the total credits and debits in Kotak Bank and IDBI bank accounts of the assessee. The copy of relevant extract of Annexures submitted to the AO is reproduced below: Thereafter, based on the submission made by the assessee the AO has made addition amounting to Rs. 2,03,41,810/-. Further, in respect to the appeal filed by the assessee against to the assessment order the ld.CIT(A) has also considered the actual rental receipts, which were amounting to Rs. 2,03,41,810/-. The relevant extract of actual receipt considered by ld.CIT(A) is reproduced below: 7.5.6. Accordingly, the said credits of Rs.2,03,41,810/- categorized by the app....
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....ed to tax by the assessee. The amount of rent income subsequently offered to tax by the assessee is reproduced below: M Sukumar Reddy HUF Gross Rent Income offered to tax Particulars 2015-16 2016-17 2017-18 2018-19 Bharti Airtel Ltd 13,09,058 1,02,15,124 1,63,21,745 1,11,72,703 Intergraph India Ltd 1,77,600 1,61,864 - - Share Microfin Ltd 1,93,811 2,03,501 1,96,351 66,900 ABB India Ltd 1,23,097 1,30,479 1,38,308 83,741 TATA Projects - - 2,16,227 1,96,573 ASMITH Microfin Ltd - - 17,291 5,892 Total 18,03,566 1,07,10,968 1,68,89,922 1,15,25,809 Further, the Ld.AR submitted that the assessee has provided all the necessary documentation to the ld.CIT(A), which clearly substantiates the actual rent receipts was amounting to Rs. 1,87,62,010/-. Out of which an amount of Rs. 18,03,566/- was offered to tax during the A.Y. under consideration and the advance received amounting to Rs. 1,70,89,288/- was offered to tax in the subsequent years i.e., for the A.Y.2016-17, A.Y.2017-18 & A.Y.2018-19 which can be verified from the table(supra) and copies of ITR filed. Theref....
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....x on the aforesaid transfer in A.Y. 2012-13, we allow ground no.3 of appeal taken by the assessee in deleting the addition made by the CIT (A)." (g) In the above circumstances, the view taken on the basis of a factual finding that no income accrued to the Respondent - Assessee before 25th April, 2011 when necessary license was granted to M/s. Skyline Mansion Pvt. Ltd. to enter upon its plot of land for the purpose of construction activities is a possible view and not shown to be arbitrary and/or perverse. This view is also supported by the statement made by the Respondent Assessee before the Tribunal as recorded in para (f) above from the impugned order. In view of the above findings of fact, the proposed question does not give rise to any substantial question of law. Thus, not entertained. In view of the above the ld.AR submitted that the income in question is not attributable to the assessee, and hence, the corresponding addition made by the ld.CIT(A) is unjustified and hence prayed for deleting the same. c) The ld.CIT(A) erred in enhancing the addition towards sale of Agricultural land amounting to Rs. 7,40,00,000/- (which includes cost of improvement amounting to....
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....lowed only the expenditure claimed by the assessee in return of income. Hence, the addition proposed by the ld.CIT(A) is a new source of income and which is beyond the scope of the powers of ld.CIT(A) u/s. 251(1)(a) of the Act, as enhancement should be confined to the issues raised and facts already available in the original assessment and the appeal. In this regard, the ld.AR relied on the decision of Hon'ble Supreme Court in the case of CIT Vs. Shapoorji Pallonji Mistry 44 ITR 891 (SC), wherein it was held that: "Section 251 of the Income-tax Act, 1961 (Corresponding to section 31(3) of the Indian Income-tax Act, 1922) - Commissioner (Appeals) - Powers of - Assessment year 1947-48 - Whether it would not be open to AAC to introduce into assessment new sources, as his power of enhancement is restricted only to income which was subject-matter of consideration for purposes of assessment by ITO - Held, yes" Similar decision has been upheld by the coordinate Bench of Chennai Tribunal in the case of Sekar Jayalakshmi vs ITO, vide ITA No. 20/Chny/2021 and the Delhi Tribunal, in the case of M/s Toffee Agricultural Farms Pvt. Ltd. vs ITO, vide ITA No. 4903/Del/2019. Furth....
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....xability. But since the Income-tax Officer has not applied his mind to the question of taxability or non-taxability of the amount of Rs. 5,85,000, the Appellate Assistant Commissioner had no jurisdiction in the circumstances of the present case to enhance the taxable income of the assessee on the basis of this amount of Rs. 5,85,000 or of any portion thereof. As we have already stated, it is not open to the Appellate Assistant Commissioner to travel outside the record, i.e., the return made by the assessee or the assessment order of the Income-tax Officer with a view to find out new sources of income and the power of enhancement under section 31(3) of the Act is restricted to the sources of income which have been the subject-matter of consideration by the Income-tax Officer from the point of view of taxability. In this context "consideration" does not mean "incidental" or "collateral" examination of any matter by the Income-tax Officer in the process of assessment. There must be something in the assessment order to show that the Income-tax Officer applied his mind to the particular subject-matter or the particular source of income with a view to its taxability or to its non-taxabil....
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....makes certain addition or disallowance and in making such additions or disallowances, he deals with such item or items of income in the body of order of assessment but he underassessed such sums; or (c) He makes no addition in respect of some of the items, though in the course of hearing before him holds a discussion of such items of income (d) Yet, there can be another situation where the Assessing Officer inadvertently omits to tax an amount which ought to have been taxed and in respect of which he does not make any enquiry. (e) Further another situation may arise, where an item or items of income or expenditure, incurred and claimed is not at all considered and an assessment is framed, as a result thereof, a prejudice is caused to the revenue, or (f) Where an item of income which ought to have been taxed remained untaxed, and there is an escapement of income, as a result of the assessee's failure to disclose fully and truly all material facts necessary for computation of income. To ensure for each of such situations, an income which ought to have been taxed and remained untaxed, the legislature has provided different remedial meas....
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....sale of agricultural land and made an addition only the part of expenditure claimed by the assessee. Hence, the ld.CIT(A) may enhance or reduce the expenditure disallowed by the AO, not on the new income source. Therefore, the ld.CIT(A) by adding the entire sale consideration of agricultural land has gone far beyond his jurisdiction and hence prayed for deleting the same. d) The ld.CIT(A) has erred in confirming the addition made as unexplained credit u/s. 69A of the Act amounting to Rs. 19,49,00,000/-. The ld.AR submitted that the AO stated that it has received loans to the tune of Rs. 34,94,50,000/- and no source has been explained. The Ld.CIT(A) erred in confirming the addition of Rs. 19,49,00,000/- as unexplained credits u/s. 69A of the Act without fairly considering the factual matrix of the case. The ld.AR submitted that the party wise details of Name, PAN, balances i.e., opening, closing and transaction during the year, with reference to paper book having ledgers with contentions of the assessee. S. No Name of the party PAN No Opening Balance Transactions during the year Closing Balance Contention of the assessee Refer....
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....ied, the addition cannot be made u/s 68/69 of the Act: * Identity of the creditors: Name, PAN and address of the creditor (mentioned above); * Genuineness of the creditor: * Creditworthiness of the creditor In view of the above, the ld.AR contended that it is established that all the three conditions are satisfied as per section 68 / 69 of the Act and hence the addition upheld by the Ld.CIT(A) as unexplained is incorrect and against the provisions of the Act. Therefore, the ld.AR prayed for deleting the addition upheld by the ld.CIT(A). Per contra the ld.DR submitted that the findings of the Assessing Officer needs to be sustained as the assessee has not furnished the entire details of advance rent received being offered in the subsequent assessment years. Further, the ld.CIT(A) has already given relief in respect of explained creditors and hence prayed for confirming the ld.CIT(A) order in respect of the sustained creditors as unexplained credits. 8. Our Findings and Adjudication - A.Y.2015-16: We have heard the rival contentions perused the material available on record and gone through the orders of the authorities below along with the paper....
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....eived from Bharti Airtel Ltd. The said amount has admittedly been offered to tax by the assessee in the subsequent assessment years on accrual basis, in accordance with law. The assessee has placed on record the tabulated details of income so offered for Assessment Years 2016-17 to 2018-19, along with copies of the respective returns of income. These documents clearly demonstrate that the advance rental receipts have already been subjected to tax in the subsequent years. The Revenue has not brought any material on record to controvert this factual position, nor has it disputed that the amounts reflected in the table have been duly disclosed in the returns of income of the subsequent assessment years. In these circumstances, bringing the very same amount to tax again in A.Y.2015-16 would result in double taxation of the same income, which is impermissible in law. It is a settled principle that income which has already been subjected to tax cannot be taxed again in another assessment year, in the absence of any statutory mandate to the contrary. M Sukumar Reddy HUF Gross Rent Income offered to tax Particulars 2015-16 2016-17 2017-18 2018-19 Bharti Airtel....
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....ordinate Bench of Chennai Tribunal in the case of Sekar Jayalakshmi vs ITO, vide ITA No. 20/Chny/2021 and the Delhi Tribunal, in the case of M/s.Toffee Agricultural Farms Pvt. Ltd. vs ITO, vide ITA No. 4903/Del/2019. We note that the ld.CIT(A) has relied upon the Supreme Court judgement held in the case of Rai Bahadur Hardutory Motilal Chamaria [1967] 66 ITR 443 (SC). The relevant paragraph of the said judgment is reproduced as under: "The principle that emerges as a result of the authorities of this court is that the Appellate Assistant Commissioner has no jurisdiction, under section 31(3) of the Act, to assess a source of income which has not been processed by the Income tax Officer and which is not disclosed either in the returns filed by the assessee or in the assessment order, and therefore the Appellate Assistant Commissioner cannot travel beyond the subject-matter of the assessment. In other words, the power of enhancement under section 31(3) of the Act is restricted to the subject matter of assessment or the source of income which have been considered expressly or by clear implication by the Income-tax Officer from the point of view of the taxability of the asse....
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....hing in the assessment order to show that the Income-tax Officer applied his mind to the particular subject-matter or the particular source of income with a view to its taxability or to its non-taxability and not to any incidental connection. In the present case, it is manifest that the Income-tax Officer has not considered the entry of Rs. 5,85,000 from the point view of its taxability and, therefore, the Appellate Assistant Commissioner had no jurisdiction, in an appeal under section 31 of the Act, to enhance the assessment." On perusal of the above decision we find that the ld.CIT(A) without considering the crux of the above case, wherein it was held that there must be something in the assessment order to show that the AO applied his mind to the particular subject-matter or the particular source of income with a view to its taxability or to its non-taxability for enhancement of the assessment by the Appellate Assistant Commissioner. Therefore, we are of the considered view that the ld.CIT(A) has erred enhancing the assessment without jurisdiction. Further, we also find that the ld.CIT(A) has also relied upon the Hon'ble High Court judgement held in the case of Gurinder Moh....
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....vides the CIT(A) could enhance such an assessment qua the under-assessed sum i.e. where the AO had dealt the issue in the assessment and was the subject matter of appeal. In category falling in (c) & (e), the CIT has been empowered to take an appropriate action under section 263 of the Act In category of cases falling under clause (d) and (f), appropriate action under section 147 of the Act can be taken to tax the income which has escaped assessment or had remained to be taxed. There can be situations where an item has been dealt with in the body of the order of assessment and the assessee being aggrieved from the addition or disallowances so made, had preferred an appeal before the CIT(A) against the said addition and disallowance, the said disallowance and addition being the subject matter of appeal before the CIT(A) in such cases, the CIT(A) has been empowered u/s 251(1)(a) of the Act, to enhance such an income where the Assessing Officer had proceeded to make addition or disallowance by dealing with the same in the body of order of assessment by under assessing the same as the same was the subject matter of the appeal as per the grounds of the appeal raised before him. In other....
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.... have been carried forward from earlier assessment years. The ledger extracts placed in the paper book clearly demonstrate that the balances are not fresh credits simpliciter during the year under consideration, but represent brought forward balances from preceding years, coupled with subsequent repayments and further transactions in later years. Certain accounts are also shown to be continuing and not squared off during the relevant previous year. These facts are borne out from the respective ledger extracts annexed in the paper book. We find merit in the contention of the Ld.AR that the AO failed to appreciate the true nature of these accounts and proceeded to treat the balances as unexplained without examining the continuity and history of the transactions. It is a settled position of law that where credits are brought forward from earlier years and have already formed part of the closing balance of preceding years, the same cannot be brought to tax in the year under consideration unless there is a fresh credit or incriminating material to justify such action. Further, the assessee has furnished complete party-wise details in respect of the loans and advances received from....
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....that the assessee's Kotak Mahindra Bank Account No.737010042783 reflected withdrawals of Rs. 7,63,84,004/- and credits of Rs. 7,63,81,708/- and that in the absence of valid explanation about the nature and source of cash credits she proceeded to add the amount of Rs. 7,63,81,708/- as income u/s. 69A of the Act. Subsequently on submission before the ld.CIT(A), observed that the assessee's Kotak Mahindra Bank Account No.737010042783 reflected withdrawals of Rs. 7,63,84,004/- and credits of Rs. 7,63,81,708/- and that in the absence of valid explanation about the nature and source of cash credits she proceeded to add the amount of Rs. 6,27,05,000/- as income u/s. 69A of the Act. In this regard the ld.AR submitted that the assessee has already furnished the details to the AO as well as the ld.CIT(A). However, both the authorities are failed to appreciate the fact and hence the impugned additions are made. The ld.AR drew our attention to the statement of party wise details of Name, PAN, balances i.e., opening, closing and transaction during the year along with reference of paper book containing the having ledger accounts of the parties with whom the transactions are carried out as ....
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....1,90,000/(Dr) Rs. 37,11,00,301/- (Cr) It's running account and for your reference ledger copies attached for subsequent transactions Confirmation Paper book 1 - P.g No 80 Ledger copy Paper book 5 P.g No 412-419 8 Rikshita K Jain AMBPJ1821H Rs.22,00,000/- (Cr) Rs.3,00,000/-(Cr) and Rs. 75,000/(Cr) (Interest on loan payable) Rs.25,75,000/- (Cr) Subsequently Payment was made in AY 2017-18 and the balance in the ledger NIL as on today Confirmation Paper book 1- P.g No 83 Ledger copy Paper book 5 P.g No 420 The ld.AR submitted that the lower authorities, without considering the fact that these account balances are the running accounts of the assessee wherein these balances are carried forward from previous years and repayments of these loans and advances are made in the subsequent years (contention of the assessee in Table(supra)) has been added as unexplained credits in the assessment. Further, the ld.AR stated that certain loan accounts are still not closed during the end of the year which are running accounts which can be observed from the respective ledgers (papers book 5). Therefore, the sa....
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.... Rs.9,00,00,000/- (Cr) and Rs. 22,99,00,000/(Dr) Rs.4,00,00,000/- (Cr) It's running account and for your reference ledger copies attached for subsequent transactions Confirmation Paper book 1- P.g No.97 Ledger copy Paper book 5 P.g No. 425-427 4. M. Sukumar Reddy(Ind) ADZPM1863H Rs.13,57,50,301.81( Cr) Rs.25,35,39,999.19/- (Cr) and Rs. 1,81,90,000/-(Dr) Rs.37,11,00,301/- (Cr) It's running account and for your reference ledger copies attached for subsequent transactions Confirmation Paper book 1- P.g No.99 Ledger copy Paper book 5 P.g No. 428-435 The Ld.AR submitted that without considering the fact that these account balances are running accounts of the assessee wherein these balances are carried forward from previous years' and repayments of these loans and advances are made in the subsequent years (contention of the assessee in Table - 2) have been added as unexplained credits in the assessment. Further, the ld.AR stated that certain loan accounts are still not closed during the year which are running accounts which can be observed from the respective ledgers (papers book 5). There....
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....ng balances, transactions during the year, and closing balances. These details were supported by ledger accounts placed in the paper book. It was contended that the transactions represented running accounts, with balances carried forward from earlier years. The repayments of loans and advances were made in subsequent years. Further, certain accounts were not closed at the end of the year, evidencing their nature as continuing running accounts. All the transactions were duly recorded in the books of account and routed through proper banking channels. We also note that no incriminating material was brought on record by the AO to establish that the credits represented undisclosed income of the assessee. Reliance was placed on various judicial precedents to defend that mere bank credits, when properly explained and recorded, cannot be brought to tax u/s. 69A of the Act. In light of the above observation, we find force in the submissions of the ld.AR from the material placed on record, it is evident that the impugned bank account transactions are not isolated cash credits but are integrally linked to the assessee's business and financial dealings, duly reflected in the books of accou....
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....laced on record. Once these three conditions are fulfilled, no addition can be made either u/s. 68 or u/s. 69A of the Act. We observe that the addition sustained by the ld.CIT(A) is based primarily on the bank statement without properly appreciating the nature of the transactions reflected therein. The documentary evidence placed before us clearly establishes that the impugned credits pertain to loans and advances from identifiable parties. The ledger accounts and confirmations demonstrate that the transactions are genuine and routed through banking channels, the creditors are identifiable and traceable, the balances are part of continuing financial relationships and not unexplained one-time receipts. It is well settled that when the assessee discharges the initial burden by establishing identity, genuineness, and creditworthiness, the onus shifts to the Department. In the present case, no contrary material has been brought on record by the AO to disprove the evidence furnished by the assessee. Further, section 69A of the Act cannot be invoked where the money is duly recorded in the books of account and the explanation regarding its source is supported by documentary ev....
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....hy Reddy ADMPM6295Q Rs.7,51,00,679.73 (Cr) Rs.95,00,000/- (Cr) and Rs. 20,000/-(Dr) Rs.8,45,80,679.73 (Cr) It's running account and for your reference ledger copies attached for subsequent transactions Confirmation Paper book 1p.g 169 Ledger copy Paper book 5 p.g 387-389 The ld.AR further submitted that both the authorities without considering the fact that these account balances are the running accounts of the assessee, wherein these outstanding balances are carried forward from previous years. Further, repayments of these loans and advances are made in the subsequent years (contention of the assessee in Table - 1). It is to be noted that certain loan accounts are still not closed during the impugned year, since these account balances are running accounts which can be observed from the respective ledgers accounts attached (papers book 5). Hence the ld.AR submitted that these amounts cannot be made as addition by the Ld.CIT(A) for the year as unexplained credits. Further, these transactions are recorded in the books of accounts and were carried out through proper banking channel. In this regard, the assessee has relied upon the var....
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....for your reference ledger copies attached for subsequent transactions Confirmation Paper book 1p.g 195 Ledger copy Paper book 5 p.g 390 2. Gulabchand Pukraj Surana AINPS9082R - Rs.20,00,000/- (Dr) Rs.20,00,000/- (Dr) It's running account and for your reference ledger copies attached for subsequent transactions Confirmation Paper book 1p.g 197 Ledger copy Paper book 5 p.g 391-392 3. Gautham Chand Jain ACLPH8536F - Rs.75,00,000/- (Dr) Rs.75,00,000/- (Dr) It's running account and for your reference ledger copies attached for subsequent transactions Confirmation Paper book 1p.g 196 Ledger copy Paper book 5 p.g 393-394 4. Hi-fashions - Kushpath D jain AEAPA7814A - Rs.21,00,000/- (Dr) Rs.21,00,000/- (Dr) Subsequently Payment was made in AY 2019-20 and the balance in the ledger NIL as on today Confirmation Paper book 1p.g 198 Ledger copy Paper book 5 p.g 395 5. K. Arvind Reddy - Rs.38,50,000/- (Cr) Rs.40,00,000/- (Dr) Rs.1,50,000/- (Dr) It's running account and for your refere....
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.... noted that certain loan accounts are still not closed during the impugned year, since these account balances are running accounts which can be observed from the respective ledgers accounts attached (papers book 5). Hence the ld.AR submitted that these amounts cannot be made as addition by the Ld.CIT(A) for the year as unexplained credits. Further, these transactions are recorded in the books of accounts and were carried out through proper banking channel. In this regard, the assessee has relied upon the various case laws. Further the ld.AR submitted that due to a clerical mistake, party named 'Platinum holdings Private Limited' account classified under the head "investments" instead of "loans and advances (Asset)" in the balance sheet of the HUF. However, the Ld.CIT(A) in its order passed on 20.03.2025, has accepted the same and treated the said amount as Loans and Advances by deleting the Addition made by the AO. The relevant extract is provided below- "In this regard, it is noted from the assessment order and the submissions of the appellant that the AO had made addition of Rs. 57,38,29,877/- on account of the investments in shares appearing in the books of accounts,....
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.... Ltd (shares) 51,000/- - 51,000/- - 51,000/- - 51,000/- - 51,000/- 2 Bathina tech India Ltd (Srico) (shares) 9,00,000/- - 9,00,000/- - 9,00,000/- - 9,00,000/- - 9,00,000/- 3 DCM Hyundai Ltd (shares) 25,000/- - 25,000/- - 25,000/- - 25,000/- - 25,000/- 4 Irmac services India Ltd(shares) 4,23,035/- - 4,23,035/- - 4,23,035/- - 4,23,035/- - 4,23,035/- 5 MSR Construction P Ltd (shares) 9,67,780/- - 9,67,780/- - 9,67,780/- - 9,67,780/- - 9,67,780/- 6 MSR Construction P Ltd (shares) 26,500/- - 26,500/- - 26,500/- - 26,500/- - 26,500/- 7 MS Reddy Estates P Ltd (shares) 11,15,860/- - 11,15,860/- - 11,15,860/- - 11,15,860/- - 11,15,860/- 8 MS Reddy Estates P Ltd (shares) 1,00,000/- - 1,00,000/- - 1,00,000/- ....
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....ents in shares amounting to Rs. 1,54,63,996/- were purchased in the earlier years. However, the ld.CIT(A) has erroneously confirmed the addition made by the AO without considering the facts and made the addition of Rs. 1,54,63,996/-. However, the AO erred in making addition of these investments as income for the year under consideration on the ground that the assessee did not furnish evidence to substantiate the source of investment in shares and securities. Additionally, in respect to the 'Loans and Advances' provided by the Assessee the ld.AR submitted that during the year the Assessee has provided Loans and Advances to the various parties amounting to Rs. 55,83,65,881/-. In this regard the ld.AR submitted that the yearwise details of Loans and Advances provided by the assessee from the FY 2013-14 to FY 2016-17. S. No Name of the party Opening Balance as on 01-04-13 Transactions during the year Closing Balance as on 31-03-14/ Opening Balance as on 01-04-14 Transactions during the year Closing Balance as on 31-03-15/ Opening Balance as on 01-04-15 Transaction s during the year Closing Balance as on 31-03-16/ Opening Balan....
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....,88,19,952/- appearing in the Kotak Mahindra Bank account of the assessee, including cash deposits of Rs. 35,11,000/-, as unexplained and made an addition u/s. 69A of the Act. On appeal, the ld.CIT(A) granted partial relief but sustained an addition of Rs. 8,00,10,000/- as unexplained credits. We note that the ld. AR submitted the complete party-wise details including name, PAN, opening balance, transactions during the year and closing balance were furnished (Table (supra)) and also submitted that the impugned balances are running accounts, with opening balances carried forward from earlier years. The repayments have been made in subsequent years and certain accounts remained outstanding at year-end and all transactions were routed through banking channels and duly recorded in the books of account. The loans and advances were received from identifiable third parties, and the assessee has discharged the onus of proving identity, genuineness, and creditworthiness. We find that the ld. CIT(A) has confirmed the addition without properly appreciating the fundamental nature of the transactions. The documentary evidence placed before us, including ledger accounts and confirmations, ....
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.... Subsequently Payment was made in AY 2019-20 and the balance in the ledger NIL as on today Confirmation Paper book 1p.g 198 Ledger copy Paper book 5 p.g 395 5. K. Arvind Reddy - Rs.38,50,000/- (Cr) Rs.40,00,000/- (Dr) Rs.1,50,000/- (Dr) It's running account and for your reference ledger copies attached for subsequent transactions Confirmation Paper book 1p.g 200 Ledger copy Paper book 5 p.g 396-397 6. K. Sreedhar Reddy - HUF AAEPK5245K Rs.18,00,000/- (Dr Rs.18,75,000/- ) (Dr) Rs.36,75,000/- (Dr) It's running account and for your reference ledger copies attached for subsequent transactions Confirmation Paper book 1p.g 201 Ledger copy Paper book 5 p.g 398-399 7. M.B. Anushree AIIPM830P Rs.2,75,64,177/- (Dr) Rs.3,40,00,000/ (Dr) Rs.6,15,64,177/- (Dr) It's running account and for your reference ledger copies attached for subsequent transactions Confirmation Paper book 1p.g 202 Ledger copy Paper book 5 400-401 8. Platinum Holdings Ltd AADCP8781D Rs.56,45,79,377/(Dr) Rs.1,27,60,000/- (Dr....
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....ransaction is explained and accepted. In view of the above, we direct for deletion of the addition of Rs. 11,58,03,416/- sustained by the ld. CIT(A). This ground of appeal is allowed. c) Addition of Rs. 1,54,63,996/- as unexplained investments u/s. 69 of the Act - Shares and Securities: The AO treated Rs. 57,38,29,877/- as unexplained investments u/s. 69 of the Act. The ld.CIT(A) deleted Rs. 55,83,65,881/- holding it to be loans and advances and sustained Rs. 1,54,63,996/- as unexplained investments. We note that the ld. AR submitted that the Investments in shares amounting to Rs. 1,54,63,996/- were acquired in earlier years. These investments were duly reflected in earlier years' returns. The ld.AR also took us through the year-wise details of investments and loans and advances were furnished and no fresh investment was made during the year under consideration. We find that the ld.CIT(A) has already accepted the assessee's contention that the bulk of the amount represents loans and advances. As regards the balance Rs. 1,54,63,996/-, the assessee has furnished documentary evidence demonstrating that these investments pertain to earlier years. Once it is establishe....
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....rd, it is found that the appellant could not furnish any details of tenants who had advanced Rs. 14,48,596/- either in the course of assessment or appeal proceedings. 7.5.5. Further, the appellant had claimed that an amount of Rs. 1,87,62,010/-was received from M/s. Janaki Rama Co-owners towards rental advance as submitted in the appeal proceedings. It was also submitted by the appellant that out of Rs. 1,87,62,010/-, an amount of Rs. 1,70,89,288/- pertains to rental advance received from M/s Bharti Airtel Limited through M/s. Janaki Rama Co-owners during the year under consideration and also claimed that the rental advance cannot be taxed as rental receipts. In this regard, the submission of the appellant and the finding of the AO in the remand report for the year under consideration and also for the AY 2017-18 are considered. On perusal of the same, it is noted that the appellant had initially held 2.5% co-ownership in M/s. Janaki Rama Co-owners whereas its share has been increased to 27.5% on the basis of the amended partnership deed of M/s Janaki Rama Co-owners dated 06.06.2014. It is also found that M/s Janaki Rama Co-owners had entered into a rental agreement with M/....
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....ount received from M/s Janakiram Co-owners to be considered as rental advance/deposit Rs.57,43,956/- Balance amount not explained to be considered as unexplained credits Rs. 15,79,800/- On the basis of the above discussion, it is held that out of total credits of Rs. 2.03,41,810/- categorized as 'Rental Receipts', the appellant could not explain the source for an amount of Rs. 15,79,800/-, which is to be considered as unexplained credits in bank account of the appellant. Further, it is also held that out of Rs. 1,87,62,010/- received from M/s Janakiram Co-owners, an amount of Rs. 1,30,18,054/- is to be treated as gross rental receipts for the year under consideration for the purpose of working out the income from house property after allowing the eligible deduction u/s 24 of the Act and the balance amount of Rs. 57,43,956/- is held to be rental advance received from the said party. Hence, the AO is directed to delete the addition to the tune of Rs. 1,30,18,054/- & Rs. 57.43,956/-and thereafter consider the amount of Rs. 1,30,18,054/- as gross rental receipts from house property and tax accordingly." Therefore, the contentions raised ....
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.... that a substantial portion represented advance rental deposits, particularly received from Bharti Airtel Ltd. Before us, the ld.DR could not controvert the factual finding recorded by the ld. CIT(A) that the advance rental receipts were not income accrued for the year under consideration and the assessee had offered such advance rental receipts to tax in subsequent assessment years, which fact is borne out by the returns of income placed on record. We find that the ld.CIT(A) has not granted any undue relief to the assessee. On the contrary, the ld.CIT(A) had sustained a part of the rental income which is questioned by the assessee in its appeal (supra) and the same has been deleted by us in ITA No.991/Chny/2025. It is a settled principle of law that advance receipts cannot be taxed unless income accrues or arises, and further, the same income cannot be taxed twice. This position is well supported by judicial precedents, including the decision of the Hon'ble Supreme Court in Berger Paints India Ltd. and the Hon'ble Bombay High Court in Skyline Great Hills. Accordingly, we find no infirmity in the order of the ld.CIT(A). The ground raised by the Revenue is devoid of meri....
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....e provided by the assessee, the ld.CIT(A) has erred in deleting the cash deposit was made out of explained sources. Therefore, the ld.DR prayed for confirming the order of the Assessing Officer in this respect by allowing the corresponding ground of appeal of the revenue. Per contra, the ld.AR argued that the income disclosed in the return of income and the cash flow statement along with the financial statements of the assessee has clearly established the source for cash deposit made to the bank account. Hence prayed for upholding the order of the ld.CIT(A). b) The ld.CIT(A) has erred in deleting the addition of Rs. 57,38,29,877/- on account of unexplained investments: The ld.DR, assailing the impugned order passed by the ld.CIT(A), vehemently contended that the ld. CIT(A) has erred both on facts and in law in deleting the addition made by the AO u/s. 69 of the Act on account of alleged undisclosed investment in shares and securities amounting to Rs. 57,38,29,877/-. It was submitted that the ld. CIT(A), without properly appreciating the factual matrix of the case and without calling for or verifying any cogent documentary evidence, accepted the explanation of the assessee ....
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....he relevant period was only Rs. 1,54,63,996/-, and even that amount pertained to earlier years. The balance amount of Rs. 55,83,65,881/- merely represented loans and advances extended in preceding years, which were duly recorded in the regular books of account and substantiated through audited financial statements. It was thus submitted that once the major component of Rs. 55,83,65,881/- has been examined and accepted by the ld. CIT(A) as explained and duly recorded in the books, and the same forms part of carried-forward balances from earlier years, the very foundation of the addition under section 69 of the Act collapses. In the absence of any material to demonstrate that the impugned amounts represented unexplained investments made during the year under consideration, the addition made by the AO is liable to be deleted in toto. The ld. AR accordingly prayed that not only the relief granted by the ld. CIT(A) be upheld, but also the balance addition of Rs. 1,54,63,996/- sustained by the ld. CIT(A) be deleted. 16. Our Findings and adjudication for the A.Y.2017-18: a) Deletion of cash deposit of Rs. 35,11,000/-: Upon careful consideration of the material available on ....
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....eport and examining the evidences placed on record, recorded a categorical finding that the sum of Rs. 55,83,65,881/- represented loans and advances carried forward from earlier years and not investments made during the year. The Revenue has not brought any material before us to controvert this factual finding of the ld.CIT(A). Therefore, the deletion of the addition to the extent of Rs. 55,83,65,881/- does not call for interference. With regard to the balance addition of Rs. 1,54,63,996/-, which has been sustained by the ld.CIT(A), we note that the assessee has contended that even these investments in shares were made in earlier years and merely continued previous year balances in the books during the year under consideration. The assessee had furnished necessary documentary evidence before the ld.CIT(A) in support of this claim. However, the ld.CIT(A), without properly appreciating the evidence and the factual matrix, confirmed the addition to this limited extent. It is further observed that the AO had proceeded on an erroneous premise by treating the aggregate sum of Rs. 57,38,29,877/- as investments made during the year, without appreciating that the actual investments in....