DEPUTY COMMISSIONER OF INCOME TAX, MADURAI vs. TVS SUPPLY CHAIN SOLUTIONS LIMITED, MADURAI

PDF · subscribers
ITA 4110/CHNY/2025Status: DisposedITAT Chennai11 May 2026AY 2016-175 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the AO should examine the reconciliation statement for the income difference on merits. For Section 14A, the Tribunal upheld the CIT(A)'s direction to re-compute the disallowance as per previous years' decisions.

What were the facts?

The assessee company's income declared was Nil, but the AO made additions for differences between Form 26AS and declared income, and disallowed expenses under Section 14A. The CIT(A) confirmed the addition for the income difference but directed re-computation of Section 14A disallowance based on earlier years' orders.

What were the issues?

Whether the addition for the difference between Form 26AS and declared income was justified without proper examination, and whether the disallowance under Section 14A should be re-computed based on prior year's orders.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI

Before: SHRI ABY T. VARKEY & MS. PADMAVATHY.S

For Respondent: Mr. V.Justin, CIT

आयकर अपीलीय अिधकरण, ‘डी’ �ायपीठ, चे�ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI �ी एबी टी. वक�, �ाियक सद� एवं सु�ी पदमावती यस, लेखा सद� के सम# BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND MS. PADMAVATHY.S, ACCOUNTANT MEMBER

ITA No.3890/CHNY/2025 (िनधा%रण वष%/Assessment Year: 2016-17) Permanent Account Number: AACCT1412E TVS SUPPLY CHAIN SOLUTIONS LTD, DEPUTY COMMISSIONER OF INCOME TAX, 10, JAWAHAR ROAD, MA RACE CORPORATE CIRCLE-2, COURSE S.O, MADURAI Vs. MADURAI. MADURAI-625002, TAMIL NADU (()थ� / Respondent) (अपीलाथ� / Appellant)

ITA No. 4110/CHNY/2025 (िनधा�रण वष�/Assessment. Year: 2016-17) Permanent Account Number: AACCT1412E TVS SUPPLY CHAIN DEPUTY COMMISSIONER OF SOLUTIONS LTD, INCOME TAX, 10, JAWAHAR ROAD, MA RACE Vs. CORPORATE CIRCLE, COURSE S.O, MADURAI MADURAI-625002, MADURAI. TAMIL NADU (अपीलाथ� / Appellant) (()थ� / Respondent)

िनधा�रती �ारा/Assessee represented by: Mr. A.S.Sriraman, Advocate राजस् व �ारा/Revenue represented by: Mr. V.Justin, CIT

सुनवाई की तारीख / Date of conclusion of hearing: 06-05-2026 घोषणा की तारीख / Date of pronouncement: 11-05-2026

ITA No.3890 & 4110/Chny/2025 TVS Supply Chain Solutions Ltd. :- 2 -: आदेश / O R D E R PER PADMAVATHY.S, A.M:

These cross appeals by the assessee and the Revenue are against the order of the Commissioner of Income Tax (Appeals), Addl./JCIT(A)-2, Chandigarh (in short "FAA") passed u/s. 250 of the Income Tax Act, 1961 (in short "the Act") dated 27.10.2025 for Assessment Year (AY) 2016-17. The appeal of the assessee pertains to the issue of addition made towards difference between the total receipts reflecting in Form-26AS and the income declared by the assessee. The appeal of the Revenue pertains to the deletion of disallowance made u/s. 14A of the Act by the A.O.

2.

The assessee is a company engaged in the business of supply chain and logistic services. The assessee filed a return of income for AY 2016-17 on 30.11.2016 declaring total income of Nil. The case was selected for scrutiny and the statutory notices were duly served on the assessee. The A.O completed the assessment by making a disallowance u/s. 14A of the Act r.w Rule 8D to the tune of Rs. 5,32,71,775/-. The A.O also made an addition of Rs. 4,64,94,542/- towards the difference between the receipts as per Form 26AA and the income declared in the return by the assessee. On further appeal, the CIT(A) directed the A.O to re-compute the disallowance towards Section 14A of the Act in accordance with the decision of the Coordinate Bench in earlier AYs. On the issue of addition made towards difference in the Revenue between form 26AS and the income offered in the ITR, the CIT(A) held that the assessee has not discharged the onus of clarifying the points stated in the reconciliation and therefore confirmed the addition. The assessee and the Revenue are in appeal before the Tribunal against the order of the CIT(A).

ITA No.3890 & 4110/Chny/2025 TVS Supply Chain Solutions Ltd. :- 3 -: Assessee's appeal in ITA NO.3890/Chny/2025: RECONCILIATION OF REVENUE: 3. We have heard the parties, and perused the material available on record. The Ld. Authorized Representative (AR) of the assessee submitted that the difference between the income declared in the return of income and the income as per 26AS is arising mainly for the reason that the assessee has booked the income on accrual basis in earlier years whereas the parties have paid the TDS as reflected in Form-26AS on payment basis during the year under consideration. In this regard, we notice that the difference between the Form 26AS and the return of income cannot be simply added to the income of the assessee and the judicial precedence hold that the A.O is required to make further enquiries and bring materials on record to conclude that the assessee has in fact understated the revenue. In the present case from the perusal of the record, we notice that the reconciliation statement submitted by the assessee have not been properly explained by the lower authorities (page 68 to 72 of paper book) therefore we are of the view that the CIT(A) is not correct in confirming the addition made towards difference without examining the issue on merits. Accordingly, we remit the issue back to the A.O with a direction to consider the reconciliation submitted by the assessee and call for necessary details as may be required to decide the issue on merits in accordance with law. Needless to say that the assessee be given a reasonable opportunity of being heard. It is ordered accordingly. The grounds raised by the assessee are allowed for statistical purposes only.

Revenue's appeal in ITA No.4110/Chny/2025: DISALLOWANCE U/S. 14A R.W RULE 8D: 4. The A.O noticed that the assessee has earned dividend income and has not made any disallowance u/s. 14A r/w. Rule 8D. After considering the

ITA No.3890 & 4110/Chny/2025 TVS Supply Chain Solutions Ltd. :- 4 -: submissions of the assessee, the A.O arrived at a disallowance Rs.5,32,71,775/-. On further appeal, the CIT(A) placed reliance on the decisions of the Coordinate Bench an identical issue in assessee's own case for AY 2012-13, AY 2013-14 and 2015-16 to hold that: “5.3 The appellant has also submitted that the AO has, subsequently, given effect to the above instructions of the Hon'ble Tribunal and worked out and restricted the disallowance in his orders passed for A.Y. 2012-13, AY 2013-14 & AY 2015-16. 5.4 As discussed above, since, the addition made in appellant's case for the year under appeal (A.Y.2016-17) is also based on similar facts & observations, the same deserves to be dealt on similar lines in view of the following judicial principles: 1. Principle of judicial consistency, demanding similar outcomes for similar cases, 2. Principle off judicial propriety, demanding that the decision of higher court is to be followed by lower authorities 5.5 In view of the above, since the issue has been adjudicated by Hon'ble Tribunal, the AO is directed to recompute disallowance of expenses relatable to exempt income u/s 14A of the Act for the A.Y.2016-17, in accordance with the directions given by the Hon'ble Tribunal in its orders referred above for A.Y. 2012-13, AY 2013-14 & AY 2015-16. Therefore this ground of appeal is allowed for statistical purpose.”

5.

We have heard the parties, and perused the material available on record. From the perusal of the finding of the CIT(A), we notice that in earlier years the Coordinate Bench has remitted the appeal back to the A.O with a direction to re-compute the disallowance by examining the merits with regard to applicability of Rule 8D(2)(ii) and 8D(iii). We further notice that the CIT(A) has for the year under consideration also applied the judicial precedence by remitting the issue back to the A.O to re-compute the disallowance. Considering the overall facts and circumstances of the case, we are of the view that there is no infirmity in the decision of the CIT(A) to remit the issue back to the A.O by following the binding precedence laid down by

ITA No.3890 & 4110/Chny/2025 TVS Supply Chain Solutions Ltd. :- 5 -: the Coordinate Bench in assessee's own case for earlier AYs. Accordingly, the grounds raised by the Revenue are dismissed.

6.

In the result, the appeal of the assessee is allowed for statistical purposes and the appeal of the Revenue is dismissed.

Order pronounced on 11th day of May, 2026 at Chennai.

Sd/- Sd/- (एबी टी. वक�) (पदमावती यस) (ABY. T. Varkey) (Padmavathy.S) लेखा सद�य सद�य /Accountant Member लेखा लेखा लेखा सद�य सद�य �याियक �याियक सद�य �याियक �याियक सद�य सद�य / Judicial Member सद�य चे�नई/Chennai, �दनांक/Dated: 11th May, 2026. EDN, Sr. P.S आदेश क� �ितिल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकर आयु!/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय �ितिनिध/DR 5. गाड� फाईल/GF EJTADA Digitally signed by EJTADA DURGA NARESH DURGA Date: 2026.05.13 NARESH 11:32:13 +05'30'

More judgments on Section 14A

All 15,875 judgments and leading authorities on Section 14A →

Recent GST High Court judgments

Search GST case law →