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Income Tax Appellate Tribunal, Hyderabad ‘DB-A‘ Bench, Hyderabad
Before: Shri Vijay Pal Rao, Vice- & Shri Madhusudan Sawdia
(िनधा�रण वष�/Assessment Year: 2015-16) Dy. CIT Vs. Sandadi Media (P) Ltd Circle 3(1) Hyderabad Hyderabad PAN:AAICS7525D (Appellant) (Respondent) िनधा��रती �ारा/Assessee by: CA B Satyanarayana Murthy राज� व �ारा/Revenue by:: Rakesh Chintagunpula, Sr. DR सुनवाई की तारीख/Date of hearing: 10/11/2025 घोषणा की तारीख/Pronouncement: 19/11/2025 आदेश/ORDER Per Madhusudan Sawdia, A.M.: This appeal is filed by the Revenue feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”) dated 30.12.2024 for the A.Y 2015-16.
The Revenue has raised the following grounds of appeal:
3. The brief facts of the case are that the assessee is a company engaged in the business of media and television. The assessee filed its return of income for Assessment Year 2015-16 on 30.09.2015 declaring Nil income. The case of the assessee was selected for scrutiny and accordingly, notice under Section 143(2) of the Income Tax Act, 1961 (“the Act”) was issued by the Learned Assessing Officer (“Ld. AO”). After considering the submissions of the assessee, the Ld. AO made an addition of Rs.4,87,50,000/- on account of investment made by the assessee in the shares of VIL Media Pvt. Ltd. during the year, holding that the assessee failed to produce adequate evidence to justify the source of the investments.
4. Aggrieved with the order of the Ld. AO, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A), after examining the explanation and documents, deleted the entire addition and allowed the appeal of the assessee.
5. Aggrieved with the order of the Ld. CIT (A), the Revenue is in appeal before this Tribunal. The Learned Departmental Representative (“Ld. DR”) submitted that the solitary issue involved in the appeal of the Revenue pertains to the deletion of the addition of Rs.4,87,50,000/- made by the Ld.AO on account of investment in VIL Media Pvt. Ltd. The Ld. DR submitted that the assessee explained before the Ld. CIT (A) the source of investment of Rs.1,33,50,000/- as adjustment of opening advances of VIL Media Pvt. Ltd. into investment in shares. For investment of Rs.75,00,000/- it was explained that the shares of VIL Media Pvt. Ltd. were purchased on credit from M/s Arudra Roofing Pvt. Ltd. For investment of Rs. 20,00,000/- it was explained that M/s Yeshwanth Realtors Pvt. Ltd. has paid the said amount to VIL Media Pvt. Ltd. on behalf of the assessee. For investment of Rs. 29,00,000/- it was explained that M/s Vinutha Infrastructure Pvt. Ltd. has paid the said amount to VIL Media Pvt. Ltd. on behalf of the assessee. However, the investment of Rs.2,30,00,000/- was directly paid from the assessee’s ICICI Bank account. In this regard, the Ld. DR contended that the Ld. CIT(A) failed to examine the commercial rationale and creditworthiness of the parties who have paid the amount on behalf of the assessee or has sold the shares on credit to the assessee. Further, the assessee had no Page 3 of 9 revenue or operational activity during the year under consideration. There was no loan agreement, no interest payment, and no financial rationale for third parties to advance such funds to the assessee. The Ld. DR further submitted that the assessee’s reserve and surplus account reflected a debit balance of Rs.1,20,43,354/- as on 31.03.2014, demonstrating lack of own funds for investment, creating doubt regarding the investment of Rs.2,30,00,000/- directly from the assessee’s Bank account. The loan creditors also did not have sufficient income to justify advances. The assessee did not produce bank statements of the alleged creditors, and the confirmations did not bear proper signatures or authentication. Therefore, the Ld. DR submitted that the Ld. CIT(A) erred in deleting the addition without proper verification and the order of the Ld. AO be restored.
6. Per contra, the Learned Authorized Representative (“Ld. AR”) supported the order of the Ld. CIT(A) and submitted that the opening balance of Rs.1,33,50,000/- due as advance from M/s. VIL Media Private Ltd stood accepted in the scrutiny assessment of the immediately preceding year. Therefore, the same cannot be questioned again. Further, the investment of Rs.75,00,000/- was made by purchased of shares from M/s Arudra Roofing Pvt. Ltd. on credit, as evidenced from the ledger account placed at page no. 11 of the paper book. The investment of Rs.20,00,000/- was directly paid by M/s Yeshwanth Realtors Pvt. Ltd. on behalf of the assessee, supported by the ledger account at page no.13 of the paper book and the investment of Page 4 of 9 Rs.29,00,000/- was paid by M/s Vinutha Infrastructure Pvt. Ltd. on behalf of the assessee, supported by ledger at page no.14 of the paper book, showing payments of Rs.5,00,000/- and Rs.24,00,000/-. Thus, no fund outflow occurred from the assessee for the investment of Rs.1,24,00,000/-. Regarding investment of Rs.2,30,00,000/-, the Ld. AR submitted that the payments were made from ICICI Bank account of the assessee, against the deposits received from the Chairman, Dr. G. Vivekananda and internal bank transfers. The Ld. AR placed on record bank statements and income tax computation and acknowledgements of Dr. G. Vivekananda and the companies involved, to substantiate the source of funds. The Ld. AR therefore submitted that the Ld. CIT(A) had rightly appreciated the documentary evidence and deleted the addition.
We have considered the rival contentions and examined the material available on record. We have gone through the various ledger accounts placed on record by the assessee which are to the following effect:
Page 5 of 9 Page 6 of 9 Page 7 of 9
On perusal of the above, we find that although the assessee has filed ledger accounts and certain supporting documents, the ledger accounts of the creditors do not bear proper signature/verification, bank statements of the creditors evidencing the outflow have not been produced, financial capacity of loan creditors has not been independently verified. Therefore, we are of the considered view that the matter requires fresh verification. Accordingly, the order of the Ld. CIT(A) is set aside, and the matter is restored to the file of the Assessing Officer with the following directions:
Page 8 of 9 (a) The assessee shall furnish valid signed confirmations of ledger accounts of the assessee in the books of all the creditors, corresponding bank statements of creditors reflecting the payments, bank statements of the assessee reflecting receipts and payments.
(b) The Ld. AO shall verify the same in accordance with law and may call for any additional evidence deemed necessary. (c) The assessee shall cooperate fully and not seek unnecessary adjournments.