NEW DREAMS LANDMARK AOP,PUNE vs. DCIT, CIR-5, PUNE, PUNE

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ITA 7/PUN/2026Status: DisposedITAT Pune12 August 2026AY 2017-188 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the issue to the Assessing Officer, granting a final opportunity to the assessee to submit requisite details and documents. The AO is directed to decide the issue afresh after considering the submitted evidence.

What were the facts?

The assessee, a builder, declared an income of Rs. 44,81,670. The AO made additions of Rs. 56,73,470 for disallowance of common expenses and Rs. 9,00,000 for cash deposits during demonetization, increasing the total income to Rs. 1,10,55,140. The CIT(A) upheld these additions.

What were the issues?

Whether common expenses allocated from a group company are allowable business expenditure and whether cash deposits during demonetization were sufficiently explained.

Which sections of the Income-tax Act were involved?

Section 37,Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE

Before: SHRI R. K. PANDA & Ms. ASTHA CHANDRA

For Appellant: Shri Mahavir Jain
For Respondent: Ms. Bhavya I.V., Jt. CIT

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND Ms. ASTHA CHANDRA, JUDICIAL MEMBER ITA No.7/PUN/2026 Assessment year : 2017-18 New Dreams Landmark AOP DCIT, Circle – 5, Pune Avdhoot Heights, S.No.210, Vs. New D P Road, Malwadi, Hadapsar, Pune – 411028 PAN: AABAD3695G (Appellant) (Respondent) Assessee by : Shri Mahavir Jain Department by : Ms. Bhavya I.V., Jt. CIT Date of hearing : 22-06-2026 Date of pronouncement : 12-08-2026

O R D E R PER ASTHA CHANDRA, JM:

The appeal filed by the assessee is directed against the order dated 04.11.2025 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2017-18.

2.

Facts of the case, in brief, are that the assessee is a firm and engaged in the business of promoter and builder of residential and commercial complex. It filed its return of income for assessment year 2017-18 declaring total income of Rs.44,81,670/- on 01.11.2017. The case was selected for scrutiny as per norms under the CASS. Accordingly notice u/s 143(2) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) was issued on 09.08.2018 and served on the assessee. Thereafter, notice u/s 142(1) of the Act along with a questionnaire was issued and served on the assessee in response to which the assessee filed all the

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requisite details through e-proceedings portal. After considering the submissions and material on record, the Ld. Assessing Officer (“AO") completed the assessment u/s 143(3) on 28.12.2019 determining the total income of the assessee at Rs.1,10,55,140/- as against the returned income of Rs.44,81,670/- by making addition of (i) Rs.56,73,470/- on account of disallowance of common expenses and (ii) Rs.9,00,000/- on account of cash deposit during the demonetization period.

3.

In appeal, the Ld. CIT(A) / NFAC upheld both the additions by observing as under:

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4.

Aggrieved with such order of the Ld. CIT(A) / NFAC the assessee is in appeal before the Tribunal by raising the following grounds: The following grounds are taken without prejudice to each other – On facts and in law. 1] The Ld. NFAC/CIT(A) has erred in confirming the income of the appellant at Rs.1,10,55,140/- as against returned income of Rs.44,81,670/-. The

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additions amounting to Rs.65,73,470/- are illegal and unsustainable in law and the same may please be deleted. 2] The Ld. NFAC/CIT(A) erred in confirming disallowance of Rs.56,73,470/- being Common Group expenses which were incurred by group company on behalf of entire group and then allocated the same on proportionate basis to the appellant. 2.1] The Ld. NFAC/CIT(A) ought to have considered the submission made by the appellant, workings of group cost allocation, certificate from the group company and the fact that the expenses were purely in the nature of business expenditure and were allowable u/s. 37. 2.2] The Ld. NFAC/CIT(A) erred in rejecting the claim of the appellant on the ground that no corroborative evidences were submitted to substantiate the claim without appreciate that it is common and consistent policy of the appellant group to allocate the group cost among the different companies based on reasonable basis and were therefore allowable u/s 37. 3] The Ld. NFAC/CIT(A) erred in confirming addition made u/s. 68 of the Act amounting to Rs.9,00,000/- on account of deposit of Specified Bank Notes into the bank account without appreciating that sources of the same were fully explained. 3.1] The Ld. NFAC/ CIT(A) ought to have considered the submission that the amount was deposited out of sufficient cash lying in hand as on 08.11.2016 which was sourced out of various previous cash withdrawals from the bank A/c. of the appellant. 4] The Ld. NFAC/CIT(A) erred in not appreciating that these evidences in respect of group cost as well as cash deposits were also furnished before the Ld. AO through e-mail who has not even taken the cognizance of the same. The matter may therefore please be referred back to the Ld. AO for verification. 4.1] Both Ld. AO / CIT(A) erred in rejecting the claim of appellant alleging that evidences furnished are not sufficient without informing the specific requirement or without calling for any further information/ clarification. The additions are therefore confirmed without following the principle of natural justice. 5] The Ld. NFAC/ CIT(A) erred in taxing the SBN deposits amounting to Rs.9,00,000/- at a higher rate of 60% and also levying surcharge of 25% without appreciating that the amendment did not exist on the date of deposit or at beginning of relevant year. 6] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.

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5.

The Ld. Counsel for the assessee drew the attention of the Bench to pages 1 to 4 of the paper book and submitted that the assessee has made the submissions before the Ld. AO through e-mail dated 20.12.2019 in support of common group expenses incurred. Referring to pages 18 to 22 of the paper book, he submitted that the assessee filed the ledger account extract of reimbursement of common expenses and working of sharing of such expenses. Referring to page 23 of the paper book, he submitted that the assessee filed copy of confirmation cum certificate from the group company in respect of reimbursement of common expenses. Referring to pages 26 to 46 of the paper book, he submitted that the assessee has filed copy of bank statements of relevant bank account for financial year 2016-17 showing both the cash deposits and cash withdrawals. However, the Assessing Officer without considering the same made additions. Referring to pages 5 to 11 of the paper book, he submitted that even before the Ld. CIT(A) / NFAC the assessee made submission on 14.10.2023. However, the assessee could not upload some details during the appellate proceedings as the tab was closed / blocked. He, accordingly, submitted that in the interest of justice, the assessee should be given an opportunity to file the requisite details before the Assessing Officer.

6.

The Ld. DR on the other hand supported the orders of the Assessing Officer and the Ld. CIT(A) / NFAC.

7.

We have heard the rival arguments made by both the sides and perused material available on records as well as the paper book filed by the Ld. AR on

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behalf of the assessee. We find the Assessing Officer in the instant case disallowed an amount of Rs.56,73,470/- under the head “Common Expenses” u/s 37 of the Act and also made addition of Rs.9,00,000/- u/s 68 being the cash deposited during the demonetization period. We find the Ld. CIT(A) / NFAC upheld the action of the Assessing Officer, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the Ld. Counsel for the assessee that the assessee has filed all the relevant details / documents before the Assessing Officer. However, the Assessing Officer without considering them has made the additions. It is his submission that the assessee could not upload certain details during the appellate proceedings as the tab was closed / blocked. It is also his submission that given an opportunity the assessee is in a position to substantiate its case by filing the requisite details. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one final opportunity to the assessee to substantiate its case by filing the requisite details / documents and decide the issue as per fact and law. The assessee is also hereby directed to submit the requisite details / documents before the Assessing Officer on the appointed date without seeking any adjournment under any pretext, failing which the Assessing Officer shall be at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

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8.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open Court on 12th August, 2026.

Sd/- Sd/- (R. K. PANDA) (ASTHA CHANDRA) VICE PRESIDENT JUDICIAL MEMBER पुणे Pune; दिन ांक Dated : 12th August, 2026 GCVSR Gajjala Chinna Digitally signed by Gajjala Chinna Venkata Subba Reddy Venkata Subba Reddy Date: 2026.08.12 16:59:53 +05'30' आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: अपील र्थी / The Appellant; 1. 2. प्रत्यर्थी / The Respondent 3. DR, ITAT, ‘B’ Bench, Pune 4. The concerned Pr.CIT, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune

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S.No. Details Date Initials Designation 1 Draft dictated on 05.08.2026 Sr. PS/PS 2 Draft placed before author 06.08.2026 Sr. PS/PS Draft proposed & placed before 3 JM/AM the Second Member Draft discussed/approved by 4 AM/AM Second Member Approved Draft comes to the 5 Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS Date on which the file goes to 9 the Office Superintendent Date on which file goes to the 10 A.R. 11 Date of Dispatch of order

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