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Facts
The assessee, a private limited company, engaged in air conditioner installation, filed its return declaring Rs.6,81,000. The AO noticed a mismatch of Rs.50,93,368 between gross receipts and Form-26AS. The assessee claimed that sales to Pooja Construction were reversed due to litigation, though TDS was reflected in Form-26AS. The AO added back the difference, which was upheld by the CIT(A).
Held
The Tribunal noted that the assessee was not provided with the statement recorded under section 133(6) and thus denied an opportunity for cross-verification. Therefore, the matter was restored to the AO for fresh adjudication.
Key Issues
Whether the addition made by the AO on account of the difference in gross receipts, without providing the assessee with a copy of the statement recorded under section 133(6) and an opportunity for cross-verification, is justified.
Sections Cited
139(1), 143(1), 133(6), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI
Before: SHRI VIKRAM SINGH YADAV & SHRI ANIKESH BANERJEE
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E”, MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A No.4483/Mum/2025 (Assessment Year: 2013-14)
Kelvin Air Conditioning and vs ITO, Ward 10(1) (4), Mumbai Ventilation System Pvt. Ltd. Room No.25(B), Aayakar Bhavan, B-40, Solaris 1, Opportunity. M.K. Road, Churchgate. L.T. Gate No.6, Saki Vihar Road, Andheri (E), Mumbai- 400072 PAN : AADCK1851B APPELLANT RESPONDENT Assessee by : Shri Nilesh Kariya Respondent by : Shri Hemanshu Joshi (SR DR)
Date of hearing : 19/01/2026 Date of pronouncement : 21/01/2026 O R D E R Per Anikesh Banerjee (JM): The instant appeal of the assessee filed against the order of the NFAC, Delhi [for brevity, ‘Ld.CIT(A)’] order passed under section 250 of the Income-tax Act, 1961 (for brevity, ‘the Act) for the Assessment Year 2013-14, date of order 29/07/2024. The impugned order emanated from the order of the Ld. Income tax
2 ITA No.4483/Mum/2025 Kelvin Air Conditioning And Ventilation Systems Pvt. Ltd. Officer -10(1) (4), Mumbai (for brevity, ‘the Ld.AO’) order passed u/s 143(3) of the Act, date of order 11/03/2016.
The registry informed that the appeal is filed by the assessee with 287 days delay. The director of the assessee-company, Mr. Raveendra Shetty filed a notarized affidavit duly executed on 12/01/2026 and explained the delay for filing appeal. The Ld. DR had not made any strong objection against the prayer of the assessee for condoning the delay. So, we find there is sufficient cause for condoning the delay for 287 days. Accordingly, we condone the delay for filing appeal for 287 days.
The brief facts of the case are that the assessee is a private limited company, engaged in business of installation of air conditioner and ventilation systems. The assessee filed the return under section 139 (1) by declaring total income of Rs.6,81,000/-. The return was processed under section 143(1) of the Act. The assessee’s case was selected for scrutiny through CASS and the statutory notices were issued. In assessment proceeding, the Ld. AO found the difference in Gross Receipt in books of accounts & Form-26AS amount of Rs.50,93,368/-. During verification, the assessee explained the difference & stated that the assessee booked the sales amount to Rs. 50,48,911/- with M/s. Pooja Construction Proprietor Mr. Vashudev Bhagnani for FY 2012-13. But due to some litigation the sale was duly reversed in the same financial year. But the TDS deducted by M/s Pooja Construction is reflected in Form-26AS which was claimed by the assessee amount to Rs.1,01,868/- during filing of return. The notice under section 133(6) was issued by the Ld. AO. The alleged party was duly complied the
3 ITA No.4483/Mum/2025 Kelvin Air Conditioning And Ventilation Systems Pvt. Ltd. said notice and confirm that the alleged sale was duly executed during the impugned assessment year. But after eight months of the alleged sale was reversed in books of accounts of the assessee. The assessee denied any banking transaction with the alleged party. The Ld. AO rejected the assessee’s claim and added back amount to Rs.50,93,368/- on account of difference of income in the profit and loss account with the Form-26AS. The aggrieved assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) considering the assessee’s submission uphold the impugned assessment order. Being aggrieved assessee filed an appeal before us.
The Ld. AR argued filed a paper book containing page 1 to 49 which has been placed on record. The Ld. AR advanced his argument and stated that the entire addition was made on basis of the statement recorded under section 133(6) from the party, M/s Pooja Construction. The assessee submitted the following documents in the paper book in relation to its claim which are as below:
Sr. No. Nature of documents ABP No. 1 Copy of ledger Account of M/s. Pooja Construction (Vasudev Lilaram 27 Bhagnani) in the Books of Appellant for the period 01-04-2012 to 31.03.2014 (A.Y. 2013-14) 2 Copy of Bank Statement having A/c No.011014100000170 held with 28-40 Bharat Co-operative Bank for the period 01.04.2011 to 31.03.2014 3 Copy of Bank Statement having A/c No.011012100002227 held with 41-44 Bharat Co-operative Bank for the period 01.04.2012 to 31.03.2014 4 Copy of Form 26AS for A.Y. 2013-14 45-49
4 ITA No.4483/Mum/2025 Kelvin Air Conditioning And Ventilation Systems Pvt. Ltd. 5. The Ld. AR further contended that the assessee had requested the Ld. CIT(A) to reverse the TDS duly deducted by the concerned party on the gross receipts, which were duly reflected in Form 26AS. He categorically denied the existence of any financial transaction between the assessee and the alleged party. The Ld. AR further submitted that a copy of the statement recorded under section 133(6) of the Act was not duly served upon the assessee for verification. Consequently, the opportunity for cross-verification between the assessee and the concerned party was denied. Accordingly, it was contended that the impugned addition is unwarranted. The Ld. AR drew our attention to paragraph 6.2 of the impugned appellate order, which is reproduced hereunder: “6.2. During the appellate proceedings, the appellant has not furnished any written submission. However it has uploaded a copy of ledger account in the name of Pooja Construction showing that the sale of Rs.50,93,368/- was returned on 31.03.2013. The sales under reference were made to Pooja construction were made on 08.05.2012 and 05.08.2012 for Rs. 43,06,484/- and Rs. 7,42,427/- respectively. The appellant has also furnished bank statement for its bank account with Bharat Cooperative Bank, Mumbai. But a perusal of the said bank account shows that there is no transaction reflecting in the said bank statement in the name of Pooja Construction. The appellant has not explained any reason for reversal of sales after more than 8 months. The appellant did not furnish any other documentary evidence proving that the sale amount received by it was reversed back to Puja Construction. The appellant has also not furnished any documentary evidence proving that it had not claimed the credit of corresponding TDS of Rs. 1,01,868/- made by Puja Construction on the payment to the appellant company. In absence of any supporting documentary evidence, I am not inclined to accept the contention of the appellant that it had not made sale of Rs. 50,93,368/- to Puja Construction or the same sales were reversed back by the appellant on the last date of the financial year under reference.
5 ITA No.4483/Mum/2025 Kelvin Air Conditioning And Ventilation Systems Pvt. Ltd. Therefore, I am not intended to interfere in the addition made by the AO. Accordingly, ground no. 1, 2 and 3 of the appeal are dismissed and not allowed.”
The Ld. DR argued and relied on the orders of revenue authorities.
We heard the rival submissions and perused the material available on record. The assessee filed its return of income, which was duly processed under section 143(1) of the Act. Subsequently, assessment proceedings were initiated by the revenue. During the course of assessment, the Ld. AO noticed a mismatch between the gross receipts declared in the Profit and Loss Account and the income reflected in Form 26AS, amounting to Rs. 50,93,368/-. A show cause notice was issued, to which the assessee denied having any sales transaction with the party, namely M/s Pooja Construction, Proprietor Mr. Vasudev Bhagnani. However, upon consideration, the Ld. AO observed that sales were recorded as having been executed by the assessee on 08.05.2012 and 05.08.2012 for amounts of Rs.43,06,484/- and Rs.7,42,427.42 respectively. It was further noted that these sales were subsequently reversed on 31.03.2013, and accordingly, the assessee reversed the said transactions in its books of account. The assessee submitted copies of its bank statements, annexed at pages 41 to 44 of the APB, and contended that no payment was received from the said party through banking channels. During the hearing before us, the Ld. AR further submitted that the TDS amount of Rs. 1,01,868/-, which was inadvertently claimed by the assessee while filing the return of income, is liable to be refunded to the revenue, as the corresponding income was not credited in the books of account. It was further contended that the statement of the said party recorded under section 133(6) of
6 ITA No.4483/Mum/2025 Kelvin Air Conditioning And Ventilation Systems Pvt. Ltd. the Act was never furnished to the assessee. Consequently, the assessee was deprived of the opportunity to verify the statement, and cross-verification with the concerned party was also denied. Thus, according to the Ld. AR, reasonable opportunity in relation to the impugned addition was not afforded to the assessee. The Ld. DR had not made any strong objection against the submissions made by the Ld. AR. In our considered view, the issue requires further factual verification by the Ld. AO. Accordingly, we restore the matter to the file of the Ld. AO with the following directions: a. The assessee shall be provided with a copy of the statement recorded under section 133(6) of the Act in respect of M/s Pooja Construction, Proprietor Mr. Vasudev Bhagnani, along with all other documents relied upon for making the impugned addition.
b. The assessee is directed to submit detailed evidence, along with its books of account, substantiating the reversal of sales amounting to Rs. 50,48,911/- during the impugned financial year, and to furnish a reconciliation explaining the difference between the gross receipts reflected in the books of account and Form 26AS, for verification by the Ld. AO.
c. If it is found that the reversal of sales is in order, the TDS amount of Rs. 1,01,868/- shall be reversed, and the said amount shall be refunded to the revenue along with applicable interest by the assessee. Accordingly, the matter is restored to the file of the Ld. AO with the directions stated above. Needless to say, the assessee shall be afforded a reasonable
7 ITA No.4483/Mum/2025 Kelvin Air Conditioning And Ventilation Systems Pvt. Ltd. opportunity of being heard in the set-aside assessment proceedings. At the same time, the assessee is directed to remain diligent and fully cooperative during the said proceedings. 7. In the result, the appeal of the assessee bearing ITA No.4483/Mum/2025 is allowed for statistical purpose.
Order pronounced in the open court on 21st day of January, 2026. Sd/- Sd/- (VIKRAM SINGH YADAV) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 21/01/2026 Saumya (Sr. P.S.) Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , 2. �ितवादी/ The Respondent. 3. आयकरआयु� CIT 4. िवभागीय�ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, Mumbai 5. गाड�फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI