DCIT, PUNE vs. JITENDRA RUGHNATH TANN, PUNE

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ITA 2055/PUN/2026Status: DisposedITAT Pune15 October 2026AY 2022-2320 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal partially allowed the Revenue's appeal for statistical purposes. Regarding the additions under sections 69 and 69A (grounds 1, 2, 3, and 4), the Tribunal upheld the CIT(A)'s deletion. It found that the investments were made out of the sale proceeds of Eternus Solutions Pvt. Ltd. shares (Rs. 58,52,72,304/-) and salary income, which were reflected in the bank statements and offered to tax as long-term capital gains. Therefore, the AO's additions were unjustified. For the deduction under section 54F (grounds 5 to 8), the Tribunal noted that the CIT(A) had deleted the addition based on a bank confirmation letter not produced before the AO, violating Rule 46A(3). Consequently, the issue was restored to the AO for verification and decision after providing the assessee an opportunity to be heard. For the disallowance of exemption under section 10(5) (grounds 9 and 10), the Tribunal found the CIT(A)'s order cryptic and restored the issue to the AO to allow the assessee an opportunity to substantiate the claim for Leave Travel Allowance and decide accordingly. The Tribunal dismissed the general ground.

What were the facts?

The Revenue appealed the CIT(A)/NFAC's order for assessment year 2022-23, which had deleted additions made by the Assessing Officer (AO). The assessee, an individual, had declared a total income of Rs. 50,95,94,020/-. The AO selected the case for scrutiny due to large deductions claimed under sections 54, 54B, 54F, 54EC, 54GB etc. The AO made additions totaling Rs. 1,31,43,13,286/- on account of unexplained investments (Rs. 1,58,96,994/- and Rs. 19,60,48,097/-), disallowance of LTCG (Rs. 7,62,02,876/-), unexplained money (Rs. 51,65,00,709/-), and disallowance of other allowance exempt (Rs. 70,590/-). The CIT(A)/NFAC deleted all these additions. The Revenue's appeal contested these deletions.

What were the issues?

The Income Tax Appellate Tribunal (ITAT) had to decide the following issues: 1. Whether the CIT(A) was justified in deleting the addition of Rs. 1,58,96,994/- made by the AO under section 69 r.w.s. 115BBE on account of unexplained investment in mutual funds and equity shares, when the assessee allegedly failed to substantiate the source of investment. 2. Whether the CIT(A) was justified in deleting the addition of Rs. 51,65,00,709/- made by the AO under section 69A r.w.s. 115BBE, considering the assessee's alleged failure to furnish documentary evidence for bank credits and transactions. 3. Whether the CIT(A) was justified in deleting the addition of Rs. 19,60,48,097/- made by the AO under section 69 r.w.s. 115BBE on account of unexplained investments in mutual funds, time deposits, and foreign remittances, given the alleged lack of supporting documents. 4. Whether the CIT(A) erred in holding that impugned transactions were sourced from sale proceeds of shares and other explained income, without establishing a one-to-one correlation, and ignoring the onus on the assessee under sections 69 and 69A. 5. Whether the CIT(A) was justified in allowing deduction of Rs. 7,62,02,876/- claimed under section 54F, without appreciating the assessee's alleged non-compliance with mandatory conditions under section 54F(4). 6. Whether the CIT(A) erred in holding that the deposit was made in a Capital Gains Account Scheme, ignoring the AO's finding that it was deposited in a savings account. 7. Whether the CIT(A) erred in allowing deduction under section 54F based on a bank confirmation letter not produced before the AO, violating Rule 46A(3). 8. Whether the CIT(A) was justified in allowing deduction under section 54F despite the assessee's failure to furnish requisite documentary evidence for deposit in the Capital Gains Account Scheme before the due date of return filing. 9. Whether the CIT(A) was justified in deleting the addition of Rs. 70,590/- on account of disallowance of exemption claimed under section 10(5), without appreciating the alleged failure to furnish documentary evidence. 10. Whether the CIT(A) erred in allowing LTA exemption without verifying mandatory conditions under section 10(5) read with Rule 2B. Assessee's Contention: Supported the CIT(A)'s order, referring to the computation of income and sale of shares of Eternus Solutions Pvt. Ltd. for Rs. 58.52 crores, which was reflected in the bank statements and offered for long-term capital gains tax. Revenue's Contention: Challenged the CIT(A)'s deletions, arguing the assessee failed to satisfactorily explain issues raised by the AO, and the CIT(A)'s order was cryptic. Specifically argued that due procedure was not followed for section 54F deduction and that the CIT(A) ignored findings of the AO regarding capital gains account deposits and documentary evidence. Relied on Humayun Suleman Merchant vs. CCIT and DCIT vs. Milind Shivaji Dedge.

Which sections of the Income-tax Act were involved?

Section 54,Section 54B,Section 54F,Section 54EC,Section 54GB,Section 143(2),Section 142(1),Section 69,Section 115BBE,Section 45,Section 69A,Section 10(5),Section 54F(4),Section 46A(3)

AI-generated summary — verify with the full judgment below

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

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

For Appellant: Shri Nikhil S Pathak
For Respondent: Shri Mithun Shete, CIT-DR

आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant; प्रत्यर्थी / The Respondent 2. 3. The concerned Pr.CIT, Pune 4. DR, ITAT, ‘A’ Bench, Pune ग र्ड फ ईल / Guard file. 5. आदेशानुसार/ BY ORDER, Sunil Kumar Digitally signed by Sunil Kumar More // True Copy // More Date: 2026.10.25 10:49:12 +05'30' Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune

20 ITA No.2055/PUN/2026

S.No. Details Date Initials Designation 1 Draft dictated on 09.10.2026 Sr. PS/PS 2 Draft placed before author 14.10.2026 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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