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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & MS. ASTHA CHANDRA
Assessment year : 2009-10 ITO, Ward 9(3), Pune Lalit Raghunathrao Shinde Vs. Plot No.93, Sector No.21, Yamunanagar, Nigdi, Pune – 411044 PAN : AERPS8682R (Appellant) (Respondent) Assessee by : Shri Dheeraj Dandgaval Department by : Shri Ramnath P Murkunde Date of hearing : 23-09-2025 Date of pronouncement : 30-10-2025 O R D E R PER R.K. PANDA, VP:
This appeal filed by the Revenue is directed against the order dated 30.04.2024 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2009-10.
This is the second round of litigation before the Tribunal. Facts of the case, in brief, are that the assessee is an individual and filed his return of income on 29.10.2009 declaring total income of Rs83,15,660/-. The case was selected for scrutiny and statutory notices u/s 143(2) and 142(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) were issued and served on the assessee. The assessment was completed u/s 143(3) of the Act on 26.12.2011 assessing the total income of the assessee at Rs.3,05,87,030/-. The assessee preferred an appeal against the addition which was deleted by the Ld. CIT(A). The Revenue preferred an appeal before the Tribunal and the Tribunal vide order dated 03.01.2016 restored the matter to the file of the Assessing Officer by observing as under: “8. On carefully consideration of the facts and circumstances of the case, we find at the outset that once the income has been accounted for in the hands of the joint venture company namely Den Manoranjan Satellite Pvt. Ltd. and assessed as such, the same income cannot be taxed in the hands of the assessee again merely because of certain differences appearing in books qua 26AS statement. The assessee has sought to demonstrate that the income has been duly accounted for and taxed in the hands of the joint venture company. We appreciate that the assessee cannot be called upon to pay taxes on the same receipt in its hands belonging to third party. However, we are of the view that the Assessing Officer is entitled to verify the correctness of the reconciliation statement and also entitled to verify whether the receipt as reflected in the 26AS statement has been declared by the other party in its return. Accordingly, we consider it expedient to remit the issue to the file of the Assessing Officer with a direction to grant relief towards receipts appropriated to third party after fresh verification on facts in accordance with law. The Assessing Officer may verify the reconciliation statement and any other documents as may be relied upon by the assessee in this regard and pass an appropriate order in terms of the observations made above.”
During the set aside proceedings the Assessing Officer asked the assessee to reconcile the figures of receipts as per 26AS statement vis-à-vis the receipts owned by the assessee in his books of account. Since the assessee had shown a receipt of Rs.1,95,07,500/- as against the figure of Rs.4,09,06,049/- in 26AS statement, therefore, the Assessing Officer noted that there is under-statement of receipts to the extent of Rs.2,13,98,549/-. He, therefore, asked the assessee to reconcile both the figures and asked the assessee to provide the following details: “(i) Reconciliation of 26AS with the books of the assessee. (ii) Amount reflected in 26AS but shown in the receipt of Den Manoranjan Satellite Pvt. Ltd. (iii) Amount reflected in assessee's 26AS and transferred to Den Manoranjan Satellite Pvt. Ltd. (iv) Bank Statement of the assesse and Den Manoranjan Satellite Pvt. Ltd. showing related transactions. (v) Bills / Vouchers issued by Den Manoranjan Satellite Pvt. Ltd. in the name of the assessee.”
Since the assessee failed to produce the requisite details to the satisfaction of the Assessing Officer, the Assessing Officer again made addition of the same by observing as under: “6.4. The AR of the assessee attended with submission on 29.12.2017 but failed to provide details as per order sheet noting 21.06.2017 and questionnaire dated 09.11.2017. AR has not produced the bank statement of assessee in support of his say regarding the amount claimed to be transferred to M/s Den Satellite Pvt. Ltd. Also, AR has not proved the amount transferred to M/s Den Satellite Pvt. Ltd. in bank statement of M/s Den Satellite Pvt. Ltd. Further, the amount which is directly credited to the bank account of M/s Den Satellite Pvt. Ltd. and reflected in 26AS of assessee remained unexplained. AR could not produce bills/vouchers issued by M/s Den Satellite Pvt. Ltd in the name of assessee. Further, assessee has not produced any evidence/document which proves that the said receipts are reflected in books of accounts of M/s Den Satellite Pvt. Ltd and same has been offered to tax by M/s Den Satellite Pvt. Ltd. Hence, assessee failed to reconcile the 26AS with books of accounts despite providing several opportunities. 6.5 In view of the above discussion, the fact remains that different parties in the satellite/media industries have credited the account of the assessee with payments and have duly deducted taxes on them. The assessee is therefore, liable to pay taxes on the receipts. He cannot on his own will, transfer the amounts which have arisen or accrued to him to third parties by entering into agreements / arrangements, whatsoever nature it may be. 6.6 In view of the above discussions in foregoing paras an income of Rs.2,13,98,549/- constituting difference of receipts between 26AS statement and the receipts shown in the books of account of the assessee, is considered as the income understated and, therefore, is added to the income of the assesses. For this act of furnishing of inaccurate particulars of income on the part of the assessee, penalty proceedings u/s 271[1][c] of the Act are initiated separately.”
Before the Ld. CIT(A) / NFAC the assessee filed written submissions based on which the Ld. CIT(A) / NFAC deleted the addition by observing as under:
Aggrieved with such order of the Ld. CIT(A) / NFAC, the Revenue is in appeal before the Tribunal by raising the following grounds:
1. On the facts and circumstances of the case and in law, the ld. CIT(A) failed to appreciate that the evidences on the basis of which he has given relief to the assessee in appeal, were never produced by the assessee before the AO during the assessment proceedings and produced for the first time before the ld. CIT(A) and therefore, the same would fall in the category of additional evidences within the meaning of Rule 46A of the I.T. Rules.
2. On the facts and circumstances of the case and in law, the ld. CIT(A) erred in admitting the additional evidences furnished by the assessee without recording a clear finding as to the circumstances as detailed in sub-rule (1) of Rule 46A under which it merited admission as additional evidence, thereby violating the mandate contained in sub-rule (2) of Rule 46A.
3. On the facts and circumstances of the case and in law, the ld. CIT(A) erred in admitting the additional evidences furnished by the assessee without giving the AO reasonable opportunity to examine the same and to furnish any evidence to rebut the same, thereby grossly disregarding the requirements as mandated in Rule 46A(3) of the IT. Rules.
4. On the facts and circumstances of the case and in law, the ld. CIT(A) erred in giving relief to the assessee on the ground that part of the receipts are transferred to the sister concern, namely, M/s Den Manoranjan Satellite Pvt. Ltd. (DMSPL) and the same are accounted for in its books, without verifying whether any expenses attributable to such receipts have been claimed by the assessee in its books. While holding so, the ld. CIT(A) also failed to verify whether such receipts have been earned by the assessee out of its own business activities and the transfer of receipts is merely an attempt to siphon off income to understate its tax liability.
5. The appellant craves leave to add to, amend, alter any of the above grounds of appeal.
The Ld. DR strongly objected to the order of the Ld. CIT(A) / NFAC deleting the addition made by the Assessing Officer. He submitted that the assessee filed certain evidences before the Ld. CIT(A) / NFAC which were not filed before the Assessing Officer and therefore, there is violation of Rule 46A of the IT Rules. He submitted that the finding of the Ld. CIT(A) / NFAC that part of the receipts are transferred to the sister concern namely M/s. Den Manoranjan Satellite Pvt. Ltd. and the same are accounted for in its books is incorrect without verifying as to whether any expenses attributable to such receipts have been claimed by the assessee in its books or not. While doing so he failed to verify whether such receipts have been earned by the assessee out of its business activities and the transfer of such receipts is merely an attempt to siphon off income to understate its tax liability. He accordingly submitted that the order of the Ld. CIT(A) / NFAC being not in accordance with law should be reversed and that of the Assessing Officer be restored.
The Ld. Counsel for the assessee on the other hand while strongly supporting the order of the Ld. CIT(A) / NFAC submitted that whatever documents were required by the Assessing Officer were filed before him. Still the Assessing Officer mentions that the assessee has not submitted any bank statement in support of the claim made in the submissions. The assessee also filed the distribution of income as per Form No.26AS of the assessee and M/s. Den Manoranjan Satellite Pvt. Ltd. in the tabulated form. It was submitted that the gross receipts determined by the Assessing Officer at Rs.1,95,07,500/- is incorrect since he has shown the carriage commission only. Other than that the assessee also has income from cable receipts, carriages, cable maintenance charges and infrastructure development. The total receipts on account of this income stood at Rs.42,59,194/-. The assessee has also collected service tax separately at Rs.29,37,563/-. Thus, the receipts of the assessee are Rs.2,67,04,257/- and not merely Rs.1,95,07,500/-. It was argued that the assessee’s business was merged / taken over by M/s. Den Manoranjan Satellite Pvt. Ltd. However, the satellite companies have not acted upon this change and have deducted tax at source in the name of the assessee only. In addition thereto there were certain receipts which were received by the assessee on behalf of the company. He submitted that the same were transferred to the company through journal entries in the books of account of the assessee. Similar corresponding entries were made in the books of account of M/s. Den Manoranjan Satellite Pvt. Ltd. and the same has been offered to income in the hands of that assessee. The assessee filed complete reconciliation statement with various details. He submitted that since the Ld. CIT(A) / NFAC after perusing the various details filed before him had deleted the addition, therefore, the same being in accordance with law should be upheld and the grounds raised by the Revenue be dismissed.
We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. From the paper book filed by the assessee we find the assessee before the Assessing Officer had filed various details which the Assessing Officer has not perused properly. When the assessee reiterated the same submissions before the Ld. CIT(A) / NFAC, the Ld. CIT(A) / NFAC in a detailed and speaking order restricted the addition to Rs.2,10,645/- and deleted the addition of Rs.2,11,87,904/-. While doing so, we find he has verified each and every entry details of which are already reproduced in the preceding paragraphs. The Ld. DR could not point out any mistake in the order of the Ld. CIT(A) / NFAC except stating that there is violation of Rule 46A of the IT Rules. However, a perusal of the details furnished before the Ld. CIT(A) / NFAC shows that those details were already filed before the Assessing Officer. Under these circumstances and in absence of any contrary material brought to our notice by the Ld. DR, we do not find any infirmity in the detailed speaking order of the Ld. CIT(A) / NFAC restricting the disallowance to Rs.2,10,645/-. We accordingly uphold the order of the Ld. CIT(A)/NFAC and dismiss the grounds raised by the Revenue.
In the result, the appeal filed by the Revenue is dismissed.
Order pronounced in the open Court on 30th October, 2025.