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Facts
The assessee's appeal pertains to Assessment Year 2021-22, challenging an order that confirmed an addition of Rs. 19,28,328/- made by the CPC. The assessee argued that these amounts were already disclosed and offered to tax or claimed as exempt in their return, leading to a double addition.
Held
The Tribunal held that the disallowance was made by the CPC solely based on the Tax Audit Report. Since the assessee had prepared a single balance sheet for individual and business affairs, and the income and capital receipt items were correctly shown, the addition was not sustainable.
Key Issues
Whether the addition made by CPC, which was already disclosed by the assessee, constitutes a double addition and is therefore unsustainable.
Sections Cited
250, 154, 44AB, 56
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of assessee pertaining to A.Y. 2021-22 is directed against the order dated 23.05.2025 of Addl/JCIT(A), Kochi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Rectification order 12.07.2023 passed u/s.154 of the Act.
The only grievance of the assessee is that ld.CIT(A) erred in confirming the action of CPC making the addition of Rs.19,28,328/- which has already been disclosed and offered to tax/claimed exemption in the income-tax return and therefore the same amounts to double addition.
We have heard the rival contentions and perused the record placed before us. We note that the assessee is an Wahida Abubkar Mukadam individual and return of income for A.Y. 2021-22 has been filed on 31.01.2022 declaring income of Rs.12,11,400/-. Assessee is carrying on the profession of running a Pathological Laboratory. Since the profit shown on the professional income was below 50%, the books of account were audited and Audit Report u/s.44AB of the Act has been furnished. The CPC while processing the return observed that in the Tax Audit Report in item 16(d) the Auditor reported about certain receipt not credited to the profit and loss account and the same are as under :
Sr. Name Amount Rs. No. 1 Salary from Yogita Dental College 2,18,000 2 Rent Nerul Flat 1,54,000 3 Rent from Mukadam Landmark 2,05,700 4 Savings Interest 10,628 5 Agricultural Income 5,00,000 6 Maturity of LIC Policy 2,90,000 7 Gifts from Relatives 5,50,000 Total Rs. 19,28,328
Before us, ld. Counsel for the assessee first referred to the computation of income placed at pages 3 to 8 of the paper book and submitted that all the above referred items mentioned in the Tax Audit Report which have been captured by CPC for the purpose of making the alleged disallowance have already been shown under the respective heads of Taxable Income as well as Exempt income. We find that salary of Rs.2,18,000/- has been shown under the head ‘Income from salary’, rent income at Rs.1,54,000/- and Rs.2,05,700/- has been shown under the head ‘Income from House Property’, Interest income of Rs.10,628/- has been shown under the head ‘Income from other sources, Agricultural Income and Maturity of LIC amounts at Rs.5.00 lakh and Rs.2.90 lakh have been shown Wahida Abubkar Mukadam under the ‘Exempt income’ and lastly the gifts from relatives have been shown in the capital account and is claimed to be exempt as having been received from the relatives referred in section 56 of the Act. We therefore find that the said disallowance has been made by CPC only on the basis of Tax Audit Report. Since the assessee has prepared a single balance sheet for the statement of affairs of the individual account as well as the business concern of renting the Pathological Laboratory, the income in the individual name as well as the capital receipt items have been directly shown in the capital account and having not been credited in the profit and loss account of the Pathological Laboratory. We are therefore of the considered view that the impugned disallowance is not sustainable and the same deserves to be deleted. Finding of ld.CIT(A) is reversed and the grounds of appeal raised by the assessee are allowed.
In the result, appeal filed by the assessee is allowed.
Order pronounced on this 12th day of September, 2025.