VINOD AGRAWAL,KAWARDHA vs. ASSISSTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE BILASPUR, BILASPUR

ITA 666/RPR/2026Status: HeardITAT Raipur21 October 2026AY 2019-205 pages
AI SummaryRemanded

What were the facts?

The assessee, Vinod Agrawal, a partnership firm engaged in works contracts, filed its return for FY 2018-19. A search under Section 132 was conducted on 09/03/2022, leading to the reopening of the case for AY 2019-20 under Section 147. A notice under Section 148 was issued on 118.11.2022. The Assessing Officer (AO) made an addition of Rs. 35,70,000/- on account of disallowance of sub-contracting expenditure. The assessee appealed to the CIT(Appeals), arguing that the impugned receipts were recognized as revenue by the sub-contractors (Smt. Naina Agrawal and Vinod Agrawal HUF) and offered for taxation, thus the disallowance in the hands of the assessee constituted double taxation. The CIT(Appeals) dismissed the appeal.

What did the Tribunal hold?

The Tribunal held that the order of the CIT(Appeals) was to be set aside and the matter remanded back for denovo adjudication. The Tribunal noted that the assessee had clearly stated that tax liabilities had been completed in the hands of the sub-contractors. The CIT(Appeals) had not conclusively denied this fact and had not conducted any independent enquiry as mandated by Sections 250(4) & (6) of the Act. The First Appellate Authority had rested her findings on the submissions without following the mandate of the Act and without arriving at independent reasoning through proper verification. The findings of the CIT(Appeals) were considered vague and not matching the assessee's submissions due to the lack of independent enquiry. Therefore, the matter was remanded back to the CIT(Appeals) for a speaking order after complying with the principles of natural justice.

What were the issues?

1. Whether the disallowance of sub-contracting expenditure in the hands of the assessee, when the corresponding receipts were offered to tax by the alleged sub-contractors, amounts to double taxation and is therefore not permissible under the Income Tax Act, 1961? (Question of law and mixed fact and law, turning on principles of computation and charging provisions). Assessee's contention: The assessee argued that the AO erred in taxing the same amount in its hands when it had already been recognized as revenue and offered for taxation by the sub-contractors, Smt. Naina Agrawal and Vinod Agrawal HUF. This resulted in double taxation, which is not acceptable. The assessee relied on the fact that the tax liabilities for these transactions were completed in the hands of the recipients. Revenue's contention: The revenue did not explicitly record any contentions in the judgment. However, the AO's action of disallowing the expenditure and the CIT(Appeals)'s reasoning implicitly suggest that the revenue contended that the allowability of expenditure must be independently satisfied by the statutory requirements and that taxability in the hands of one person does not automatically confer deductibility in the hands of another.

Which sections of the Income-tax Act were involved?

Section 132,Section 147,Section 148,Section 151,Section 250(4),Section 250(6),Section 44AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAIPUR BENCH “SMC”, RAIPUR

Before: SHRI PARTHA SARATHI CHAUDHURY

For Appellant: Shri Dinesh Kumar Agrawal &, Ms. Namrata Kayarwar, CAs
For Respondent: Shri Piyush Tripathi, Sr. DR
Hearing: 21.10.2026Pronounced: 21.10.2026

PER PARTHA SARATHI CHAUDHURY, JM The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals), Raipur-3, dated 30.07.2026 for the assessment year 2019-20 as per the grounds of appeal on record.

2.

Brief facts in this case are as follows:

“3. Brief Facts of the Case: - The appellant, M/s Vinod Agrawal is a partnership firm duly constituted and engaged in th

The order continues below.

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