ACIT, CHENNAI vs. MENAKURU SUKUMAR REDDY, CHENNAI

PER S. R. RAGHUNATHA, AM :

:-2-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025

The present batch of appeals comprises ITA Nos.991 to 993/Chny/2025 pertaining to the Assessment Years 2015-16, 2016-17 and 2017-18, which have been preferred by the assessee. Further, ITA Nos.1639 and 1664/Chny/2025 relating to the Assessment Years 2015-16 and 2017-18 have been preferred by the Revenue. Since common issues are involved in these appeals, they were heard together and are being disposed of by this consolidated order for the sake of convenience and brevity.

3.1 A.Y. 2015-16:

The brief facts emanating from the records are that the assessee is a HUF, engaged in the business of Renting out properties and also received interest income. The AO had reopened assessment for the A.Y.2015-16, u/s.147 of the

:-3-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 Act and issued a Notice dated 30.03.2021 u/s.148 of the Act. The assessee filed its Return of Income on 22.03.2022 in response to notice u/s.148 of the Act admitting a total income of Rs.12,61,730/- and paid taxes and interest due on the income admitted.

In response to the notices issued by the AO, the assessee replied to all the issues raised by the AO by letters dated 11.12.2021, 27.12.2021, 06.01.2022, 05.02.2022, 03.03.2022, 11.03.2022 and 24.03.2022. The AO issued Show cause Notice on 30.03.2022 and passed an Assessment Order U/s.143(3) r.w.s.147 of the Act on 31.03.2022 by adding Rs.39,14,72,602/- as Undisclosed Income u/s.69A of the Act as detailed below:

Aggrieved by the above assessment order u/s.143(3) r.w.s 147 of the Act, the assessee preferred an appeal before the Ld.CIT(A), Chennai. The Ld.CIT(A) passed an order dated 20.03.2025 by allowing the appeal of the assessee partly and also made an enhancement of assessment without issuing any statutory notice u/s.251(2) of the Act to the assessee and sustained the following additions:

 Rental Income amounting Rs. 15,79,800/-  Sale of Land amounting to Rs. 50,79,685/-  Unsecured loans amounting to Rs.19,49,00,000/-  Transfer from Individual Accounts Rs. 1,22,00,000/-

3.2 AY 2016-17 The assessee had not filed the Return of Income and hence, the AO had reopened assessment U/s.147 of the Act and issued a Notice dated 30.03.2021 u/s.148 of

:-4-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 the Act for the A.Y. 2016-17. The assessee filed its Return of Income on 10.12.2021 in response to notice u/s.148 of the Act admitting a total income of Rs.72,15,650/- and paid taxes and interest due on the income admitted.

In response to the notices issued by the AO, the assessee replied to all the issues raised by the AO by filing letters dated 11.12.2021, 05.02.2022, 03.03.2022 and 21.03.2022. After considering the submissions of the assessee the AO issued SCN on 30.03.2022 and passed the Assessment Order u/s.143(3) r.w.s.147 of the Act dated 31.03.2022 by making the addition of Rs.17,60,31,484/- as Undisclosed Income U/s.69A of the Act as detailed below:

1) Total Credits in Kotak Mahindra Bank Rs.7,63,81,708/- A/c No 737010042783 2) Cash Deposits in Kotak Mahindra Bank Rs. 29,05,000/- A/c No 737010042783 3) Total Credits in IDBI Bank Rs.9,61,19,571/- A/c. No0028104000324564 4) Total Credits in IDBI Bank Rs. 6,25,205/- A/c. No. 0887104000072690 TOTAL Rs. 17,60,31,484/-

Aggrieved by the above assessment order u/s.143(3) r.w.s 147 of the Act, the assessee preferred an appeal before the Ld.CIT(A), Chennai. The Ld.CIT(A) passed an order dated 20.03.2025 by allowing the appeal of the assessee partly and sustained the following additions:

 Unexplained credits u/s.69A in Kotak Mahindra Bank (account No.737010042783) Rs.6,27,05,000/-  Unexplained credits u/s 69A in IDBI Bank (account No. 0028104000324564) Rs.7,04,50,000/-  Unexplained credits u/s 69A in IDBI Bank (account No. 0887104000072690) Rs. 6,25,000/-

:-5-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 3.3 A.Y.2017-18

The assessee had not filed the Return of Income and hence, the AO had reopened assessment U/s.147 of the Act and issued a Notice dated 30.03.2021 U/s.148 of the Act for the A.Y. 2017-18. The assessee filed the Return of Income on 11.12.2021 in response to notice U/s.148 of the Act admitting a total income of Rs.1,14,00,760/- and paid taxes and interest due on the income admitted.

In response to the notices issued by the AO, the assessee replied to all the issues raised by the AO by filing letters dated 11.12.2021, 05.02.2022, 03.03.2022 and 21.03.2022. The AO issued SCN on 30.03.2022 and passed an Assessment Order U/s.143(3) rws.147 of the Act on 31.03.2022 by making the addition of Rs.166,41,22,057/- as Undisclosed Income U/s.69A of the Act as detailed below:

1) Total Credits in Kotak Mahindra Bank Rs.14,88,19,952/- A/c No 737010042783 2) Cash Deposits in Kotak Mahindra Bank Rs. 35,11,000/- A/c No 737010042783 3) Total Credits in IDBI Bank (14.01.2015 to Rs.40,78,43,826/- 31.03.2017) A/c. No0028104000324564 4) Loans and Advances Rs. 53,01,17,402/- 5) Investments in Shares and Securities Rs. 57,38,29,877/- TOTAL Rs. 166,41,22,057/- Aggrieved by the above Assessment order u/s.143(3) rw.s.147 of the Act dated 31.03.2022, the assessee filed an appeal before ld.CIT(A) dt.28.04.2022. The ld.CIT(A) passed an order u/s.250 of the Act on 20.03.2025 by sustaining the below mentioned additions to total Income:

1) Total Credits in Kotak Mahindra Bank Rs.8,00,10,000/- A/c No 737010042783 2) Loans & Advances Rs.11,58,03,416/- 3) Investments in Shares and Securities Rs. 1,54,63,996/- TOTAL Rs. 21,12,77,412/-

:-6-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025

Aggrieved by the above Orders u/s.250 of the Act for the A.Y.2015-16 to A.Y.2017-18, the assessee filed three separate appeals before us for the respective assessment years. The revenue also filed a two separate appeals against the order of the ld.CIT(A) in respect of A.Ys.2015-16 and 2017-18.

:-7-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 5. The assessee also raised the following grounds of appeal on merits in respect of each A.Ys. separately:

5.1 ITA 991/CHNY/2025 – A.Y. 2015-16 a) Addition amount sustained by the Hon’ble CIT(A) amounting to Rs.15,79,800/- as unexplained credits is incorrect and bad-in-law.

b) Hon’ble CIT(A) erred in considering Advance rental receipts as rental income for the year under consideration amounting to Rs.1,30,18,054/-

c) The Hon’ble CIT(A) erred in enhancing the addition towards sale of Agricultural land amounting to Rs.7,40,00,000/- (which includes cost of improvement amounting to Rs.50,79,685/-).

d) The ld.CIT(A) has erred in confirming the addition made as unexplained credit u/s.69A of the Act amounting to Rs.19,49,00,000/-.

5.2 ITA 992/CHNY/2025 – A.Y. 2016-17 a) The Ld. CIT(A) has erred in making addition amounting to Rs.6,27,05,000/- as unexplained income under section 69A of the Act. b) Wrongful addition made amounting to Rs.7,04,50,000/- towards unexplained credits u/s. 69A of the Act

5.3 ITA 993/CHNY/2025 – A.Y. 2017-18 a) The Addition as made by AO of Rs.8,00,10,000/- as unexplained credits u/s.69A of the Act. b) Wrong addition amounting to Rs.11,58,03,416/- made as unexplained credits u/s. 69A of the Act. c) Wrong addition amounting to Rs.1,54,63,996/- as unexplained investments for the investments in shares and securities.

6.1 ITA No.1639/Chny/2025 for the A.Y.2015-16

:-8-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 d) The ld.CIT(A) has erred in deleting the rental receipts of Rs.1,91,37,917/-. e) The ld.CIT(A) has erred in deleting the cash deposit of Rs.28,30,000/-. f) The ld.CIT(A) has erred in deleting the addition of Rs.45,00,000/- which has been transferred from individual accounts.

6.2 ITA No.1644/Chny/2025 for the A.Y.2017-18

g) The ld.CIT(A) has erred in deleting the cash deposit of Rs.35,11,000/-. h) The ld.CIT(A) has erred in deleting the addition of Rs.57,38,29,877/- on account of unexplained investments.

Before us the ld.AR for the assessee assailing the action of the ld.CIT(A) submitted that the ld.CIT(A) has erred in rejecting the legal grounds raised by the assessee in respect of validity of issue of notice u/s.148 of the Act by the Jurisdictional AO, the notice u/s.148 of the Act was not served to the email ID of the assessee and hence the entire proceedings are void ab initio and the notice has not been affixed with the DIN. On all these counts the order of the AO for the impugned A.Ys.2015-16, 2016-17 and 2017-18 are is void ab initio and hence does not exist in the eyes of law.

The ld.AR buttressed his arguments on merits on year wise based on the grounds of appeal raised as detailed below:

In this regard the ld.AR submitted that for the year under consideration the AO vide order dt. 31.02.2022 has made addition amounting to Rs.2,03,41,810/- as unexplained rental income of the assessee.

The ld.AR submitted that during the scrutiny proceedings the assessee has submitted two annexures which contain the total credits and debits in Kotak Bank

:-9-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 and IDBI bank accounts of the assessee. The copy of relevant extract of Annexures submitted to the AO is reproduced below:

Thereafter, based on the submission made by the assessee the AO has made addition amounting to Rs.2,03,41,810/-. Further, in respect to the appeal filed by the assessee against to the assessment order the ld.CIT(A) has also considered the actual rental receipts, which were amounting to Rs.2,03,41,810/-. The relevant extract of actual receipt considered by ld.CIT(A) is reproduced below:

:-10-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025

The ld.AR submitted that upon verification of records by us it was found that the actual rent receipts received from JRC (Janakiram Co-Owners) (i.e., in Annexure – B - IDBI Bank) was amounting to Rs.40,36,706/- and not the amount of Rs.56,16,466/-. The actual rent receipts can be evidenced from the IDBI Bank statements of the assessee and the same has been enclosed in the paper book – 1 vide Pg.No:137-139 and the dates on which the amount was received is reproduced below:.

Date Received from Amount (Rs.) 05-03-2015 JRC (Janakiram Co-Owners) 1,25,000 11-03-2015 JRC (Janakiram Co-Owners) 10,39,206 14-01-2015 JRC (Janakiram Co-Owners) 14,75,000 14-01-2015 JRC (Janakiram Co-Owners) 1,47,500 07-02-2015 JRC (Janakiram Co-Owners) 1,25,000 11-02-2015 JRC (Janakiram Co-Owners) 11,25,000

:-11-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 TOTAL 40,36,706

Therefore, the total amount of actual rent receipts received by the assessee in his both the bank accounts (i.e., in Kotak Bank and IDBI Bank account) was amounting to Rs.1,87,62,010/- for the A.Y.2015-16 and not the amount considered by the Ld.AO/ Hon’ble CIT(A) i.e., Rs.2,03,41,810/-.

Therefore, the ld.CIT(A) sustained addition of Rs.15,79,800/- towards unexplained credits is incorrect and bad-in-law.

b) Ld.CIT(A) erred in considering Advance rental receipts as rental income for the year under consideration amounting to Rs.1,30,18,054/-:

The ld.AR submitted that during the year under consideration the actual amount of rent receipts was amounting to Rs.1,87,62,010/-. Out of total receipts an amount of Rs.1,70,89,288/- was received as rental advance from Bharati Airtel Limited.

Further, it is pertinent to note that the rental advance amounting to Rs.1,70,89,288/- (i.e., received from Bharati Airtel Limited), the same has been subsequently offered to tax by the assessee. The amount of rent income subsequently offered to tax by the assessee is reproduced below:

M Sukumar Reddy HUF Gross Rent Income offered to tax Particulars 2015-16 2016-17 2017-18 2018-19 Bharti Airtel Ltd 13,09,058 1,02,15,124 1,63,21,745 1,11,72,703 Intergraph India Ltd 1,77,600 1,61,864 - - Share Microfin Ltd 1,93,811 2,03,501 1,96,351 66,900 ABB India Ltd 1,23,097 1,30,479 1,38,308 83,741 TATA Projects - - 2,16,227 1,96,573

:-12-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025

ASMITH Microfin Ltd - - 17,291 5,892 Total 18,03,566 1,07,10,968 1,68,89,922 1,15,25,809

Further, the Ld.AR submitted that the assessee has provided all the necessary documentation to the ld.CIT(A), which clearly substantiates the actual rent receipts was amounting to Rs.1,87,62,010/-. Out of which an amount of Rs.18,03,566/- was offered to tax during the A.Y. under consideration and the advance received amounting to Rs.1,70,89,288/- was offered to tax in the subsequent years i.e., for the A.Y.2016-17, A.Y.2017-18 & A.Y.2018-19 which can be verified from the table(supra) and copies of ITR filed. Therefore, once the rental advance was offered to tax in subsequent years, then the addition on the same income will lead to double taxation which is incorrect and bad in law. Further, in support of the above the ld.AR relied upon the following case laws: • The decision held by the Hon’ble Supreme Court of India in the case of Berger Paints India Ltd. Vs. Commissioner of Income-tax [2004] 135 Taxman 586 (SC). • The Decision of High Court of Mumbai held in the case of Skyline Great Hills Vs. Commissioner of Income Tax – 21, Mumbai [2016] 68 taxmann.com 188 (Bombay) wherein, it was held that: There can be no dispute with the submission advanced by Mr. Pinto that accrual of income in case of mercantile system of accounting would warrant the same being brought to tax. However, the dispute between the parties is when did the income arise/accrue? The contesting alternatives are the subject Assessment Year as contended by the Revenue or A.Y. 2012-13 or as contended by the Assessee i.e. when the possession of land by way of license was given to M/s. Skyline Mansion Pvt. Ltd. The Tribunal has in the impugned order rendered a finding of fact that when the security deposit was received under the joint development agreement dated 4th April 2008, no sale took place as no conveyance was executed. Further, the land and rights in respect thereof being stock in trade and not capital assets of the Respondent Assessee, no sale under the Transfer of Property Act also took place in the subject Assessment Year. The impugned order holds that in terms of the joint development agreement dated 4th April, 2008, only after all the requisite permissions are obtained, would the obligation to issue a license to M/s. Skyline Mansions Pvt. Ltd. to enter upon the Respondent - Assessee's land

:-13-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 would be granted. It is on the above date 25th April, 2011 i.e. the date when the license was granted to M/s. Skyline Mansion Pvt. Ltd. that income can be said to have accrued. Therefore, on the date when the security deposit was received, in view of the findings of fact rendered by the Tribunal, there is no income earned by the Respondent - Assessee in respect of its security deposit of Rs. 54.68 crores. (f) Further, one must not overlook that the impugned order of the Tribunal records the fact "Since assessee stated that the assessee has already offered income to tax on the aforesaid transfer in A.Y. 2012-13, we allow ground no.3 of appeal taken by the assessee in deleting the addition made by the CIT (A)." (g) In the above circumstances, the view taken on the basis of a factual finding that no income accrued to the Respondent - Assessee before 25th April, 2011 when necessary license was granted to M/s. Skyline Mansion Pvt. Ltd. to enter upon its plot of land for the purpose of construction activities is a possible view and not shown to be arbitrary and/or perverse. This view is also supported by the statement made by the Respondent Assessee before the Tribunal as recorded in para (f) above from the impugned order. In view of the above findings of fact, the proposed question does not give rise to any substantial question of law. Thus, not entertained. In view of the above the ld.AR submitted that the income in question is not attributable to the assessee, and hence, the corresponding addition made by the ld.CIT(A) is unjustified and hence prayed for deleting the same.

c) The ld.CIT(A) erred in enhancing the addition towards sale of Agricultural land amounting to Rs.7,40,00,000/- (which includes cost of improvement amounting to Rs.50,79,685/-):

The ld.AR submitted that during the year the assessee has sold agricultural land for a consideration of amounting to Rs.7,40,00,000/- and has disclosed Rs.6,89,20,315/- as net of development expenditure incurred in the return of income filed by the assessee. During the assessment proceedings on perusal of the submission made by the assessee, the AO disallowed development expenditure incurred by the assessee of Rs.50,79,685/- on various dates. Without considering the submission made and expenditure incurred for the building located on the agricultural land serves as a storage facility for the cultivator. It is

:-14-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 used to store agricultural tools, equipment, seeds, fertilizers and harvested crops. This ensures that all necessary resources are readily available to the cultivator and helps in the efficient management of agricultural activities on the land.

Sl.no Date Amount in Rs.

1 Opening Balance 17,90,775

2 31.03.2001 24,67,160

3 16.12.2003 2,26,000

4 01.04.2004 5,35,750

5 29.09.2008 60,000

Total Expenses 50,79,685

The AO made addition of Rs.50,79,685/- towards unexplained expenditure claimed from the sale of agricultural property. Aggrieved by the addition made, the assessee filed an appeal before ld.CIT(A) and raised grounds on disallowance of development expenditures.

During the first appellate proceedings the assessee made submission with respect to disallowances made towards development expenditure incurred by the assessee. However, the ld.CIT(A), without considering the issue under consideration i.e., disallowance of expenditure, enhanced the income of the assessee by proposing the addition of total sale consideration received on account of sale of agricultural land.

The ld.AR submitted that with respect to enhancement of income, as per section 251(1)(a) of the Act, any appeal against an order of assessment, the ld.CIT(A)

:-15-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 may confirm, reduce, enhance or annul the assessment, but there is no such power provided by the law that the ld.CIT(A) could change the opinion than the AO has taken in the assessment order and provision of law qua the item of which assessment was made.

Further, in the case of assessee the ld.CIT(A) has made addition towards entire sale consideration of agricultural land made by the assessee, whereas the AO examined the transaction and disallowed only the expenditure claimed by the assessee in return of income. Hence, the addition proposed by the ld.CIT(A) is a new source of income and which is beyond the scope of the powers of ld.CIT(A) u/s.251(1)(a) of the Act, as enhancement should be confined to the issues raised and facts already available in the original assessment and the appeal.

In this regard, the ld.AR relied on the decision of Hon’ble Supreme Court in the case of CIT Vs. Shapoorji Pallonji Mistry 44 ITR 891 (SC), wherein it was held that: “Section 251 of the Income-tax Act, 1961 (Corresponding to section 31(3) of the Indian Income-tax Act, 1922) - Commissioner (Appeals) - Powers of - Assessment year 1947-48 - Whether it would not be open to AAC to introduce into assessment new sources, as his power of enhancement is restricted only to income which was subject-matter of consideration for purposes of assessment by ITO - Held, yes”

Similar decision has been upheld by the coordinate Bench of Chennai Tribunal in the case of Sekar Jayalakshmi vs ITO, vide ITA No. 20/Chny/2021 and the Delhi Tribunal, in the case of M/s Toffee Agricultural Farms Pvt. Ltd. vs ITO, vide ITA No. 4903/Del/2019. Further, the ld.CIT(A) in his order dt. 20.03.2025 has relied upon the Supreme Court judgement held in the case of Rai Bahadur Hardutory Motilal Chamaria [1967] 66 ITR 443 (SC). The relevant paragraph of the said judgment is reproduced as under:

:-16-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025

“The principle that emerges as a result of the authorities of this court is that the Appellate Assistant Commissioner has no jurisdiction, under section 31(3) of the Act, to assess a source of income which has not been processed by the Incometax Officer and which is not disclosed either in the returns filed by the assessee or in the assessment order, and therefore the Appellate Assistant Commissioner cannot travel beyond the subject-matter of the assessment. In other words, the power of enhancement under section 31(3) of the Act is restricted to the subjectmatter of assessment or the source of income which have been considered expressly or by clear implication by the Income-tax Officer from the point of view of the taxability of the assessee. It was argued by Mr. Viswanatha Iyer on behalf of the appellant that, by applying the principle to the present case, the Appellate Assistant Commissioner had jurisdiction to enhance the quantum of income of the assessee. It was pointed out that the fact of the alleged transfer of Rs. 5,85,000 to Forbesganj branch was noted by the Income-tax Officer and also the fact that it did not reach Forbesganj on the same day. So, it was argued that in the appeal the Appellate Assistant Commissioner had jurisdiction to deal with the question of the taxability of the amount of Rs. 5,85,000 and to hold that it was taxable as undisclosed profits in the hands of the assessee. We are unable to accept the argument put forward on behalf of the appellant as correct. It is true that the Income-tax Officer has referred to the remittance of Rs. 5,85,000 from the Calcutta branch, but the Income-tax Officer considered the despatch of this amount only with a view to test the genuineness of the entries relating to Rs. 4,30,000 in the books of the Forbesganj branch. It is manifest that the Income-tax Officer did not consider the remittance of Rs. 5,85,000 in the process of assessment from the point of view of its taxability. It is also manifest that the Appellate Assistant Commissioner has considered the amount of remittance of Rs. 5,85,000 from a different aspect, namely, the point of view of its taxability. But since the Income-tax Officer has not applied his mind to the question of taxability or non-taxability of the amount of Rs. 5,85,000, the Appellate Assistant Commissioner had no jurisdiction in the circumstances of the present case to enhance the taxable income of the assessee on the basis of this amount of Rs. 5,85,000 or of any portion thereof. As we have already stated, it is not open to the Appellate Assistant Commissioner to travel outside the record, i.e., the return made by the assessee or the assessment order of the Income-tax Officer with a view to find out new sources of income and the power of enhancement under section 31(3) of the Act is restricted to the sources of income which have been the subject-matter of consideration by the Income-tax Officer from the point of view of taxability. In this context "consideration" does not mean "incidental" or "collateral" examination of any matter by the Income-tax Officer in the process of assessment. There must be something in the assessment order to show that the Income-tax Officer applied his mind to the particular subject-matter or the particular source of income with a view to its taxability or to its non-taxability and not to any incidental connection. In the present case, it is manifest that the Income-tax Officer has not considered the entry of Rs. 5,85,000 from the point view of its taxability and, therefore, the Appellate Assistant Commissioner had no jurisdiction, in an appeal under section 31 of the Act, to enhance the assessment.”

:-17-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 The ld.AR contended that the ld.CIT(A) without considering the crux of the above case, wherein it was held that there must be something in the assessment order to show that the AO applied his mind to the particular subject-matter or the particular source of income with a view to its taxability or to its non-taxability for enhancement of the assessment by the Appellate Assistant Commissioner.

Whereas, in the present case, the ld.CIT(A) has made an enhancement on the entire amount received on the sale of agricultural land, which is a new issue that was not part of the original assessment. Further, it is beyond the scope of the ld.CIT(A)’s powers u/s.251(1)(a) of the Act, as an enhancement should be confined to the issues raised and facts already available in the original assessment and the appeal.

Hence, the ld.CIT(A) could only enhance the assessment based on the issues that were already part of the assessment. Any enhancement of income on a completely new ground, i.e., on the sale of agricultural land, is beyond the jurisdiction of the ld.CIT(A) as provided u/s.251(1)(a) of the Act.

Further, the ld.CIT(A) has also relied upon the Hon’ble High Court judgement held in the case of Gurinder Mohan Singh Nindrajog v. CIT [2012] 18 taxmann.com 176 (Delhi) wherein it was held as under:

“14. We have considered the submissions of both the parties. There is no doubt about the fact that while framing the assessment even under Section 143(3) of the Act, the Assessing Officer may omit to make certain additions of income or omit to disallow certain claims which are not admissible under the provisions of the Act thereby leading to escapement of income. The Income-Tax Act provides for remedial measures which can be taken under these circumstances. While framing an assessment under Section 143(3) of the Act, any of the following situation may occur:- (a) The Assessing Officer may accept the return of income without making any addition or disallowance; or

:-18-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 (b) The assessment is framed and the Assessing Officer makes certain addition or disallowance and in making such additions or disallowances, he deals with such item or items of income in the body of order of assessment but he under- assessed such sums; or (c) He makes no addition in respect of some of the items, though in the course of hearing before him holds a discussion of such items of income (d) Yet, there can be another situation where the Assessing Officer inadvertently omits to tax an amount which ought to have been taxed and in respect of which he does not make any enquiry. (e) Further another situation may arise, where an item or items of income or expenditure, incurred and claimed is not at all considered and an assessment is framed, as a result thereof, a prejudice is caused to the revenue, or (f) Where an item of income which ought to have been taxed remained untaxed, and there is an escapement of income, as a result of the assessee's failure to disclose fully and truly all material facts necessary for computation of income. To ensure for each of such situations, an income which ought to have been taxed and remained untaxed, the legislature has provided different remedial measures as are contained in sections 251(1)(a), 263, 154 and 147 of the Act. In the category stated in (a), obviously if an income escapes an assessment, the provisions of Section 147 of the Act can be invoked, subject to the condition stated in the proviso of the said section. In the category of cases falling in category (b), section 251(1)(a) provides the CIT(A) could enhance such an assessment qua the under-assessed sum i.e. where the AO had dealt the issue in the assessment and was the subject matter of appeal. In category falling in (c) & (e), the CIT has been empowered to take an appropriate action under section 263 of the Act In category of cases falling under clause (d) and (f), appropriate action under section 147 of the Act can be taken to tax the income which has escaped assessment or had remained to be taxed. There can be situations where an item has been dealt with in the body of the order of assessment and the assessee being aggrieved from the addition or disallowances so made, had preferred an appeal before the CIT(A) against the said addition and disallowance, the said disallowance and addition being the subject matter of appeal before the CIT(A) in such cases, the CIT(A) has been empowered u/s 251(1)(a) of the Act, to enhance such an income where the Assessing Officer had proceeded to make addition or disallowance by dealing with the same in the body of order of assessment by under assessing the same as the same was the subject matter of the appeal as per the grounds of the appeal raised before him. In other words, the CIT(A) has a power of enhancement in respect of such item or items of income which has been dealt with in the body of the order of the assessment, and arose for his consideration as per the grounds of appeal raised before him, being the subject matter of appeal.”

The ld.AR contended that in the above case, wherein it was held that if the category of cases falling in category (b), section 251(1)(a) provides the ld.CIT(A)

:-19-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025

could enhance such an assessment qua the under-assessed sum i.e. where the AO had dealt the issue in the assessment and was the subject matter of appeal.

In the present case the AO restricted himself to expenditure disallowance only, enhancement must also be confined to that issue. Further, the AO never examined about the income part of sale of agricultural land, which means the AO has accepted the sale of agricultural land and made an addition only the part of expenditure claimed by the assessee.

Hence, the ld.CIT(A) may enhance or reduce the expenditure disallowed by the AO, not on the new income source. Therefore, the ld.CIT(A) by adding the entire sale consideration of agricultural land has gone far beyond his jurisdiction and hence prayed for deleting the same.

d) The ld.CIT(A) has erred in confirming the addition made as unexplained credit u/s.69A of the Act amounting to Rs.19,49,00,000/-.

The ld.AR submitted that the AO stated that it has received loans to the tune of Rs.34,94,50,000/- and no source has been explained. The Ld.CIT(A) erred in confirming the addition of Rs.19,49,00,000/- as unexplained credits u/s.69A of the Act without fairly considering the factual matrix of the case. The ld.AR submitted that the party wise details of Name, PAN, balances i.e., opening, closing and transaction during the year, with reference to paper book having ledgers with contentions of the assessee. Reference of S Confirmation letters and Contention of the assessee . Name of Opening Transactions Ledger copies submitted PAN No during the year Closing Balance N the party Balance in paper book o Subsequently Payment was Confirmation made in AY 2015-16 and the Paper book 1- P.g No 174 M Sailaja 1 Rs.30,00,000/- Rs.30,00,000/- - balance in the ledger NIL as Ledger copy (Cr) (Cr) on today Paper book 5 P.g No 531

Subsequently Payment was Confirmation Pavan made in AY 2018-19 and the Paper book 1- P.g No 180 2 Kumar AAEPP1448D Rs.5,00,000/- Rs.5,00,000/- - balance in the ledger NIL as Ledger copy Reddy. M (Cr) (Cr) on today Paper book 5 P.g No 532

:-20-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025

Subsequently Payment was Confirmation Rs.15,00,000/- made in AY 2015-16 and the Paper book 1- P.g No 182 Syed Abdul 3 (Dr)and balance in the ledger NIL as Ledger copy Ali ADEPA6325P - - Rs.15,00,000/- on today Paper book 5 P.g No 533 (Cr) It’s running account and for Confirmation your reference ledger copies Paper book 1- P.g No 177 Transtroy 4 attached for subsequent Ledger copy AABCT4226B Rs.17,99,00,000/- Rs.17,99,00,000/- (India) - transactions Paper book 5 P.g No 534- (Cr) (Cr) Limited 536

Subsequently Payment was Confirmation made in AY 2021-22 and the Paper book 1- P.g No 182 5 P Nanda ACUPP6100E Rs.85,00,000/- Rs.1,00,00,000/- Rs.1,85,00,000/- balance in the ledger NIL as Ledger copy on today Paper book 5 P.g No - Kumar (Cr) (Cr) (Cr) 537

The ld.AR drew our attention to the table (supra) and submitted that during the year without considering the fact that these account balances are the running accounts of the assessee wherein these balances are carried forward from previous years and repayments of these loans and advances are made in the subsequent years and certain loan accounts are still not closed during the year which are running accounts which can be observed from the respective ledgers extracts attached (paper book 5). In this regard, the ld.AR relied upon various judicial precedents. The ld.AR further contended that the loans and advances taken by the assessee are from 3rd parties during the year of which the following details are submitted in the Paper book regarding the identity, genuineness and creditworthiness has been proved by the assessee. Further, when the below conditions are satisfied, the addition cannot be made u/s 68/69 of the Act: • Identity of the creditors: Name, PAN and address of the creditor (mentioned above); • Genuineness of the creditor: • Creditworthiness of the creditor

In view of the above, the ld.AR contended that it is established that all the three conditions are satisfied as per section 68 / 69 of the Act and hence the addition upheld by the Ld.CIT(A) as unexplained is incorrect and against the provisions of

:-21-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 the Act. Therefore, the ld.AR prayed for deleting the addition upheld by the ld.CIT(A).

Per contra the ld.DR submitted that the findings of the Assessing Officer needs to be sustained as the assessee has not furnished the entire details of advance rent received being offered in the subsequent assessment years. Further, the ld.CIT(A) has already given relief in respect of explained creditors and hence prayed for confirming the ld.CIT(A) order in respect of the sustained creditors as unexplained credits.

The assessee has raised common legal grounds challenging the validity of the reassessment proceedings on the following counts:

(i) Lack of jurisdiction in issuance of notice u/s 148 of the Act; (ii) Improper service of notice u/s 148 on an incorrect email ID; and (iii) Absence of Document Identification Number (DIN) in the assessment order. However, since the detailed arguments were also addressed on merits by the parties, we first proceed to adjudicate the same:

a) Addition of Rs.15,79,800/- on Account of Alleged Unexplained Rental Receipts:

The AO as well as the Ld.CIT(A) proceeded on an erroneous premise that the total rental receipts of the assessee amounted to Rs.2,03,41,810/-.

:-22-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 Upon a careful perusal and verification of the bank statements placed on record in the paper book, particularly the statements pertaining to the IDBI Bank and Kotak Bank accounts, we find considerable merit in the submissions advanced by the Ld.AR. The material on record clearly evidences that the actual rental receipts received during the relevant previous year aggregate to Rs.1,87,62,010/-

It is further observed that the amount of Rs.56,16,466/- considered by the authorities below as receipts from JRC (Janakiram Co-Owners) is factually incorrect. The correct amount of receipts from the said party, as borne out from the bank statements and the date-wise details furnished before us, is Rs.40,36,706/-.

The detailed date-wise reconciliation of receipts placed before us substantiates the contention of the assessee. Significantly, the said factual position has not been controverted by the Revenue by bringing any cogent material on record. In the absence of any rebuttal, the documentary evidence furnished by the assessee deserves to be accepted.

In view of the above factual matrix, the very basis on which the addition of Rs.15,79,800/- was sustained ceases to survive. Consequently, we hold that the addition sustained by the Ld.CIT(A) is factually unsustainable and legally untenable. The same is hereby directed to be deleted.

b) Taxability of Advance Rental Receipts of Rs.1,30,18,054/-:

It is an undisputed position on record that, out of the total receipts in question, a substantial portion pertains to advance rent received from Bharti Airtel Ltd. The said amount has admittedly been offered to tax by the assessee in the subsequent assessment years on accrual basis, in accordance with law.

:-23-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 The assessee has placed on record the tabulated details of income so offered for Assessment Years 2016-17 to 2018-19, along with copies of the respective returns of income. These documents clearly demonstrate that the advance rental receipts have already been subjected to tax in the subsequent years. The Revenue has not brought any material on record to controvert this factual position, nor has it disputed that the amounts reflected in the table have been duly disclosed in the returns of income of the subsequent assessment years.

In these circumstances, bringing the very same amount to tax again in A.Y.2015- 16 would result in double taxation of the same income, which is impermissible in law. It is a settled principle that income which has already been subjected to tax cannot be taxed again in another assessment year, in the absence of any statutory mandate to the contrary.

M Sukumar Reddy HUF Gross Rent Income offered to tax Particulars 2015-16 2016-17 2017-18 2018-19 Bharti Airtel Ltd 13,09,058 1,02,15,124 1,63,21,745 1,11,72,703 Intergraph India Ltd 1,77,600 1,61,864 - - Share Microfin Ltd 1,93,811 2,03,501 1,96,351 66,900 ABB India Ltd 1,23,097 1,30,479 1,38,308 83,741 TATA Projects - - 2,16,227 1,96,573 ASMITH Microfin Ltd - - 17,291 5,892 Total 18,03,566 1,07,10,968 1,68,89,922 1,15,25,809

The settled legal position that the same income cannot be subjected to tax twice is no longer res integra and stands affirmed by the Hon’ble Supreme Court in Berger Paints India Ltd. as well as by the Hon’ble Bombay High Court in Skyline

:-24-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 Great Hills. Respectfully following the aforesaid binding judicial precedents, we are of the considered view that the action of the Ld.CIT(A) in treating the advance rental receipts as income of the year under consideration is contrary to the settled principles governing accrual of income and the doctrine of real income.

In the absence of accrual of the right to receive the income during the relevant previous year, the impugned addition cannot be sustained. Accordingly, the addition so made is hereby directed to be deleted.

c) Enhancement in Respect of Sale of Agricultural Land – Rs.7,40,00,000/-:

We find substantial force in the contention of the ld. AR that the ld. CIT(A) has travelled beyond his jurisdiction by enhancing the assessment with respect to the entire sale consideration of agricultural land. From the assessment order, it is evident that the AO had accepted the sale transaction and examined only the allowability of development expenditure of Rs.50,79,685/-, claimed in the return of income. The taxability of the sale consideration itself was never a subject- matter of assessment. The enhancement made by the ld.CIT(A) therefore introduces a new source of income, which is clearly prohibited u/s.251(1)(a) of the Act.

The law on this issue is settled by the Hon’ble Supreme Court in Shapoorji Pallonji Mistry (44 ITR 891) and Rai Bahadur Hardutory Motilal Chamaria (66 ITR 443), wherein it has been categorically held that the appellate authority cannot assess a new source of income not considered by the AO. We also find support from the decisions of the Chennai Bench and Delhi Bench of the Tribunal relied upon by the assessee.

We also find that similar decision has been upheld by the coordinate Bench of Chennai Tribunal in the case of Sekar Jayalakshmi vs ITO, vide ITA No.

:-25-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 20/Chny/2021 and the Delhi Tribunal, in the case of M/s.Toffee Agricultural Farms Pvt. Ltd. vs ITO, vide ITA No. 4903/Del/2019.

We note that the ld.CIT(A) has relied upon the Supreme Court judgement held in the case of Rai Bahadur Hardutory Motilal Chamaria [1967] 66 ITR 443 (SC). The relevant paragraph of the said judgment is reproduced as under:

“The principle that emerges as a result of the authorities of this court is that the Appellate Assistant Commissioner has no jurisdiction, under section 31(3) of the Act, to assess a source of income which has not been processed by the Incometax Officer and which is not disclosed either in the returns filed by the assessee or in the assessment order, and therefore the Appellate Assistant Commissioner cannot travel beyond the subject-matter of the assessment. In other words, the power of enhancement under section 31(3) of the Act is restricted to the subjectmatter of assessment or the source of income which have been considered expressly or by clear implication by the Income-tax Officer from the point of view of the taxability of the assessee. It was argued by Mr. Viswanatha Iyer on behalf of the appellant that, by applying the principle to the present case, the Appellate Assistant Commissioner had jurisdiction to enhance the quantum of income of the assessee. It was pointed out that the fact of the alleged transfer of Rs. 5,85,000 to Forbesganj branch was noted by the Income-tax Officer and also the fact that it did not reach Forbesganj on the same day. So, it was argued that in the appeal the Appellate Assistant Commissioner had jurisdiction to deal with the question of the taxability of the amount of Rs. 5,85,000 and to hold that it was taxable as undisclosed profits in the hands of the assessee. We are unable to accept the argument put forward on behalf of the appellant as correct. It is true that the Income-tax Officer has referred to the remittance of Rs. 5,85,000 from the Calcutta branch, but the Income-tax Officer considered the despatch of this amount only with a view to test the genuineness of the entries relating to Rs. 4,30,000 in the books of the Forbesganj branch. It is manifest that the Income-tax Officer did not consider the remittance of Rs. 5,85,000 in the process of assessment from the point of view of its taxability. It is also manifest that the Appellate Assistant Commissioner has considered the amount of remittance of Rs. 5,85,000 from a different aspect, namely, the point of view of its taxability. But since the Income-tax Officer has not applied his mind to the question of taxability or non-taxability of the amount of Rs. 5,85,000, the Appellate Assistant Commissioner had no jurisdiction in the circumstances of the present case to enhance the taxable income of the assessee on the basis of this amount of Rs. 5,85,000 or of any portion thereof. As we have already stated, it is not open to the Appellate Assistant Commissioner to travel outside the record, i.e., the return made by the assessee or the assessment order of the Income-tax Officer with a view to find out new sources of income and the power of enhancement under section 31(3) of the Act is restricted to the sources of income which have been the subject-matter of consideration by the Income-tax Officer from the point of view of taxability. In this context "consideration" does not mean "incidental" or "collateral" examination of any matter by the Income-tax Officer in the process of assessment. There must be something in the assessment order to show that the

:-26-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 Income-tax Officer applied his mind to the particular subject-matter or the particular source of income with a view to its taxability or to its non-taxability and not to any incidental connection. In the present case, it is manifest that the Income-tax Officer has not considered the entry of Rs. 5,85,000 from the point view of its taxability and, therefore, the Appellate Assistant Commissioner had no jurisdiction, in an appeal under section 31 of the Act, to enhance the assessment.”

On perusal of the above decision we find that the ld.CIT(A) without considering the crux of the above case, wherein it was held that there must be something in the assessment order to show that the AO applied his mind to the particular subject-matter or the particular source of income with a view to its taxability or to its non-taxability for enhancement of the assessment by the Appellate Assistant Commissioner. Therefore, we are of the considered view that the ld.CIT(A) has erred enhancing the assessment without jurisdiction.

Further, we also find that the ld.CIT(A) has also relied upon the Hon’ble High Court judgement held in the case of Gurinder Mohan Singh Nindrajog v. CIT [2012] 18 taxmann.com 176 (Delhi) wherein it was held as under:

“14. We have considered the submissions of both the parties. There is no doubt about the fact that while framing the assessment even under Section 143(3) of the Act, the Assessing Officer may omit to make certain additions of income or omit to disallow certain claims which are not admissible under the provisions of the Act thereby leading to escapement of income. The Income-Tax Act provides for remedial measures which can be taken under these circumstances. While framing an assessment under Section 143(3) of the Act, any of the following situation may occur:- (a) The Assessing Officer may accept the return of income without making any addition or disallowance; or (b) The assessment is framed and the Assessing Officer makes certain addition or disallowance and in making such additions or disallowances, he deals with such item or items of income in the body of order of assessment but he under- assessed such sums; or (c) He makes no addition in respect of some of the items, though in the course of hearing before him holds a discussion of such items of income (d) Yet, there can be another situation where the Assessing Officer inadvertently omits to tax an amount which ought to have been taxed and in respect of which he does not make any enquiry.

:-27-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025

(e) Further another situation may arise, where an item or items of income or expenditure, incurred and claimed is not at all considered and an assessment is framed, as a result thereof, a prejudice is caused to the revenue, or (f) Where an item of income which ought to have been taxed remained untaxed, and there is an escapement of income, as a result of the assessee's failure to disclose fully and truly all material facts necessary for computation of income. To ensure for each of such situations, an income which ought to have been taxed and remained untaxed, the legislature has provided different remedial measures as are contained in sections 251(1)(a), 263, 154 and 147 of the Act. In the category stated in (a), obviously if an income escapes an assessment, the provisions of Section 147 of the Act can be invoked, subject to the condition stated in the proviso of the said section. In the category of cases falling in category (b), section 251(1)(a) provides the CIT(A) could enhance such an assessment qua the under-assessed sum i.e. where the AO had dealt the issue in the assessment and was the subject matter of appeal. In category falling in (c) & (e), the CIT has been empowered to take an appropriate action under section 263 of the Act In category of cases falling under clause (d) and (f), appropriate action under section 147 of the Act can be taken to tax the income which has escaped assessment or had remained to be taxed. There can be situations where an item has been dealt with in the body of the order of assessment and the assessee being aggrieved from the addition or disallowances so made, had preferred an appeal before the CIT(A) against the said addition and disallowance, the said disallowance and addition being the subject matter of appeal before the CIT(A) in such cases, the CIT(A) has been empowered u/s 251(1)(a) of the Act, to enhance such an income where the Assessing Officer had proceeded to make addition or disallowance by dealing with the same in the body of order of assessment by under assessing the same as the same was the subject matter of the appeal as per the grounds of the appeal raised before him. In other words, the CIT(A) has a power of enhancement in respect of such item or items of income which has been dealt with in the body of the order of the assessment, and arose for his consideration as per the grounds of appeal raised before him, being the subject matter of appeal.”

In our considered view, in the above case, it was held that if the category of cases falling in category (b), section 251(1)(a) provides the ld.CIT(A) could enhance such an assessment qua the under-assessed sum i.e. where the AO had dealt the issue in the assessment and was the subject matter of appeal.

We find that in the present facts of the case the AO restricted himself to expenditure disallowance only and accordingly the enhancement must also be confined to that issue. Further, the AO never examined about the income part of

:-28-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 sale of agricultural land, which means the AO has accepted the sale of agricultural land and made an addition only the part of expenditure claimed by the assessee. Hence, the ld.CIT(A) could only enhance the assessment based on the issues that were already part of the assessment. Any enhancement of income on a completely new ground, i.e., on the sale of agricultural land, is beyond the jurisdiction of the ld.CIT(A) as provided u/s.251(1)(a) of the Act.

In view of the above reasoning, we are of the considered opinion that the ld.CIT(A) may enhance or reduce the expenditure disallowed by the AO, not on the new income source. Therefore, the ld.CIT(A) by adding the entire sale consideration of agricultural land has gone far beyond his jurisdiction and hence the same is liable to be deleted.

Accordingly, the enhancement made by the ld.CIT(A) in respect of sale of agricultural land is without jurisdiction and bad in law, and hence we are setting aside the order of the ld.CIT(A) and delete the addition of Rs.7.40 Crores.

d) Addition of Rs.19,49,00,000/- as Unexplained Credits u/s 69A of the Act:

We have carefully considered the rival submissions and perused the material available on record, including the paper book filed by the ld.AR. The grievance of the assessee pertains to the sustenance of addition by the ld.CIT(A) under section 68/69 of the Act, without properly appreciating the factual matrix and evidences placed on record.

At the outset, it is observed that the impugned loan accounts are admittedly running and continuing accounts, which have been carried forward from earlier assessment years. The ledger extracts placed in the paper book clearly demonstrate that the balances are not fresh credits simpliciter during the year under consideration, but represent brought forward balances from preceding

:-29-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 years, coupled with subsequent repayments and further transactions in later years. Certain accounts are also shown to be continuing and not squared off during the relevant previous year. These facts are borne out from the respective ledger extracts annexed in the paper book.

We find merit in the contention of the Ld.AR that the AO failed to appreciate the true nature of these accounts and proceeded to treat the balances as unexplained without examining the continuity and history of the transactions. It is a settled position of law that where credits are brought forward from earlier years and have already formed part of the closing balance of preceding years, the same cannot be brought to tax in the year under consideration unless there is a fresh credit or incriminating material to justify such action.

Further, the assessee has furnished complete party-wise details in respect of the loans and advances received from third parties during the year. The documentary evidence placed on record include name, address and PAN of the creditors, establishing identity. Confirmations and ledger extracts reflecting the transactions, establishing genuineness. Financial particulars and relevant supporting documents evidencing creditworthiness.

Once the assessee has discharged the initial onus cast upon it u/s.68/69 of the Act by furnishing primary evidence to establish the identity of the creditors, genuineness of the transactions, and creditworthiness of the parties, the burden shifts upon the Revenue to rebut such evidence by bringing cogent material on record. In the present case, no adverse material has been brought on record by the AO to controvert the evidence furnished by the assessee. The addition appears to have been sustained merely on surmises and without any independent enquiry or rebuttal.

:-30-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 We also note that the Ld.CIT(A) has granted partial relief by accepting a substantial portion of the credits (Rs. 34,94,50,000/- minus Rs.19,49,00,000/- aggregating to Rs.15,45,50,000/-) as explained u/s.69A of the Act, on the basis of the very same set of documents and evidence. In our considered view, once the documentary evidence has been accepted as satisfactory for a substantial part of the transactions, there remains no justification to sustain the addition in respect of the remaining balances in the absence of any distinguishing feature or adverse finding.

It is well-settled that mere existence of old or running accounts cannot ipso facto lead to an inference of unexplained credit, particularly when the balances are carried forward from earlier years and are duly reflected in the books of account. In the absence of any finding that the evidence furnished are false, fabricated, or unreliable, the addition cannot be sustained merely on suspicion.

In view of the foregoing discussion, we are of the considered opinion that the assessee has satisfactorily discharged the burden cast upon it u/s.68/69 of the Act. The addition sustained by the Ld.CIT(A) is, therefore, unsustainable both on facts and in law. Accordingly, the same is directed to be deleted.

In the result the appeal of the assessee is allowed.

The AO observed that the assessee’s Kotak Mahindra Bank Account No.737010042783 reflected withdrawals of Rs.7,63,84,004/- and credits of Rs.7,63,81,708/- and that in the absence of valid explanation about the nature and source of cash credits she proceeded to add the amount of Rs.7,63,81,708/- as income u/s.69A of the Act.

:-31-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 Subsequently on submission before the ld.CIT(A), observed that the assessee’s Kotak Mahindra Bank Account No.737010042783 reflected withdrawals of Rs.7,63,84,004/- and credits of Rs.7,63,81,708/- and that in the absence of valid explanation about the nature and source of cash credits she proceeded to add the amount of Rs.6,27,05,000/- as income u/s.69A of the Act.

In this regard the ld.AR submitted that the assessee has already furnished the details to the AO as well as the ld.CIT(A). However, both the authorities are failed to appreciate the fact and hence the impugned additions are made. The ld.AR drew our attention to the statement of party wise details of Name, PAN, balances i.e., opening, closing and transaction during the year along with reference of paper book containing the having ledger accounts of the parties with whom the transactions are carried out as detailed below:

:-32-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025

. Name of the PAN No Opening Transactions Closing Contention of the Reference of N party Balance during the year Balance assesse confirmation letters o and ledger copies submitted in paper book 1 Mohammed - Rs.5,00,000/-(Cr) Rs.5,00,000/- Subsequently Payment Confirmation Arif Abdul (Cr) was made in AY 2017-18 Paper book 1 P.g No 67 and the balance in the Ledger copy ledger NIL as on today Paper book 5 P.g No 395

2 Ronak K Jain AMBPJ1827B Rs.5,50,000/-(Cr) Rs.5,66,500/- It’s running account and Confirmation (Loan amount) (Cr) for your reference ledger Paper book 1- P.g No 69 and copies attached for Ledger copy Rs.16,500(Cr)(Inte subsequent transactions Paper book 5- P.g No rest payable on 396-399 such loan) 3 Transstroy AABCT4226B Rs.17,99,00,000 Rs.9,00,00,000/- Rs.4,00,00,000/ It’s running account and Confirmation India Ltd /-(Cr) (Cr) and -(Cr) for your reference ledger Paper book 1- P.g No 72 Rs.22,99,00,000/- copies attached for Ledger copy (Dr) subsequent transactions Paper book 5 P.g No 400-402 4 Vaishnavi AACFV7094H - Rs. 50,00,000/- Rs. 40,00,000/- Subsequently Payment Confirmation Corporation (Cr) and Rs. was made in AY 2018-19 Paper book 1- P.g No 10,00,000/-(Dr) and the balance in the 74 ledger NIL as on today Ledger copy Paper book 5 P.g No 403 5 Kushpat D AACHK8358P Rs.8,50,000/- Rs.6,50,000/-(Cr) Rs.15,45,000/- It’s running account and Confirmation Jain(HUF) (Cr) and Rs.45,000/- (Cr) for your reference ledger Paper book 1- P.g No (Cr) (Interest copies attached for 75 Payable on such subsequent transactions Ledger copy loan) Paper book 5 P.g No 404-407 6 M.Malathy ADMPM6295Q Rs.7,28,10,680 Rs.22,90,000/- Rs.7,51,00,680/ It’s running account and Confirmation Reddy /-(Cr) (Cr) -(Cr) for your reference ledger Paper book 1- P.g No copies attached for 78 subsequent transactions Ledger copy Paper book 5 P.g No 408-411 7 M. Sukumar ADZPM1863H Rs.13,57,50,302 Rs.25,35,39,999/- It’s running account and Confirmation Reddy (Ind) /-(Cr) (Cr) and Rs.37,11,00,301/- for your reference ledger Paper book 1 - P.g No Rs.1,81,90,000/- (Cr) copies attached for 80 (Dr) subsequent transactions Ledger copy Paper book 5 P.g No 412-419 8 Rikshita K AMBPJ1821H Rs.22,00,000/- Rs.3,00,000/-(Cr) Rs.25,75,000/- Subsequently Payment Confirmation Jain (Cr) and Rs.75,000/- (Cr) was made in AY 2017-18 Paper book 1- P.g No (Cr) (Interest on and the balance in the 83 loan payable) ledger NIL as on today Ledger copy Paper book 5 P.g No 420

The ld.AR submitted that the lower authorities, without considering the fact that

these account balances are the running accounts of the assessee wherein these

balances are carried forward from previous years and repayments of these loans

and advances are made in the subsequent years (contention of the assessee in

:-33-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 Table(supra)) has been added as unexplained credits in the assessment. Further, the ld.AR stated that certain loan accounts are still not closed during the end of the year which are running accounts which can be observed from the respective ledgers (papers book 5). Therefore, the same cannot be made as addition as confirmed by the Ld.CIT(A) for the year as unexplained as all the transactions are recorded in the books of accounts and transactions have been made through proper banking channel. In this regard, the assessee has relied upon the various case laws and judicial precedents.

In view of the above arguments the ld.AR prayed for deleting the additions in the interest of justice.

b) Addition of Rs.7,04,50,000/- unexplained credits u/s.69A of the Act:

The AO has made addition amounting to Rs.9,61,19,571/- towards unexplained credits in IDBI Bank account u/s.69A of the Act without considering the facts and submission of the case. Subsequently during first appellate proceedings, the ld.CIT(A) has sustained amounting to Rs.7,04,50,000/- as unexplained credits in IDBI Bank account u/s.69A of the In this regard the ld.AR submitted that the assessee has already furnished the details to the AO as well as the ld.CIT(A). However, both the authorities are failed to appreciate the fact and hence the impugned additions are made. The ld.AR drew our attention to the statement of party wise details of Name, PAN, balances i.e., opening, closing and transaction during the year along with reference of paper book containing the confirmations and ledger accounts of the parties with whom the transactions are carried out as detailed below:

:-34-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025

S.no Name of the PAN Opening Balance Transactions during Closing Balance Contention of the Reference of party the year assesse confirmation letters and ledger copies submitted in paper book

3 Transtroy(India) AABCT4226B Rs.17,99,00,000/- Rs.9,00,00,000/- (Cr) Rs.4,00,00,000/- It’s running account Confirmation (Cr) and Rs.22,99,00,000/- (Cr) and for your Paper book 1- P.g Ltd (Dr) reference ledger No.97 copies attached for Ledger copy subsequent Paper book 5 P.g No. transactions 425-427

The Ld.AR submitted that without considering the fact that these account balances are running accounts of the assessee wherein these balances are carried forward from previous years’ and repayments of these loans and advances are made in the subsequent years (contention of the assesse in Table - 2) have been added as unexplained credits in the assessment. Further, the ld.AR stated that certain loan accounts are still not closed during the year which are running accounts which can be observed from the respective ledgers (papers book 5). Therefore, the same cannot be made as addition as confirmed by the Ld.CIT(A) for the year as unexplained as all the transactions are recorded in the books of accounts and transactions have been made through proper banking channel. In this regard, the assessee has relied upon the various case laws and judicial precedents.

:-35-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 Further, the ld.AR argued that the loans and advances taken by the assessee are from 3rd parties during the year of which the following details are submitted in the Paper book regarding the identity, genuineness and creditworthiness are proved by the assessee. Further, when the below conditions are satisfied, addition cannot be made u/s.68/69 of the Act:

• Identity of the creditors: Name, PAN and address of the creditor • Genuineness of the creditor: • Creditworthiness of the creditor From the above analysis it is established that all the three conditions are satisfied for the year and hence the addition confirmed by the Ld.CIT(A) as unexplained is incorrect and against the provisions of the Act. Therefore, the ld.AR prayed for deleting the addition made for the year under consideration.

Per contra the ld.DR relied on the orders of the AO as well as the ld.CIT(A) and prayed for confirming the same.

We have carefully considered the rival submissions, perused the material available on record, including the paper books filed by the assessee, and examined the orders of the lower authorities.

Ground No. (a): Addition of Rs.6,27,05,000/- as unexplained income u/s.69A of the Act – Kotak Mahindra Bank Account:

The Assessing Officer observed that the assessee’s Kotak Mahindra Bank Account No.737010042783 reflected total withdrawals of Rs.7,63,84,004/- and credits of Rs.7,63,81,708/- during the relevant assessment year. In the absence of what was considered to be a satisfactory explanation regarding the nature and

:-36-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 source of the credits, the AO treated the entire amount as unexplained income u/s.69A of the Act.

During appellate proceedings, the ld. CIT(A), after examining the submissions, restricted the addition to Rs.6,27,05,000/- and sustained the same as unexplained income u/s 69A of the Act.

The ld.AR submitted that complete details were furnished both before the AO and the ld.CIT(A), including party-wise statements containing names, PANs, opening balances, transactions during the year, and closing balances. These details were supported by ledger accounts placed in the paper book. It was contended that the transactions represented running accounts, with balances carried forward from earlier years. The repayments of loans and advances were made in subsequent years. Further, certain accounts were not closed at the end of the year, evidencing their nature as continuing running accounts. All the transactions were duly recorded in the books of account and routed through proper banking channels. We also note that no incriminating material was brought on record by the AO to establish that the credits represented undisclosed income of the assessee. Reliance was placed on various judicial precedents to defend that mere bank credits, when properly explained and recorded, cannot be brought to tax u/s.69A of the Act.

In light of the above observation, we find force in the submissions of the ld.AR from the material placed on record, it is evident that the impugned bank account transactions are not isolated cash credits but are integrally linked to the assessee’s business and financial dealings, duly reflected in the books of account. The party-wise statements and ledger accounts demonstrate that the opening balances were brought forward from earlier years, transactions during the year represent receipts and repayments in the course of continuing financial relationships, closing balances are carried forward to subsequent years.

:-37-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 Further, section 69A of the Act contemplates a situation where the assessee is found to be the owner of money not recorded in the books of account and for which no satisfactory explanation is offered. In the present case, the amounts are admittedly recorded in the books, supported by ledger accounts, and routed through banking channels. The lower authorities have not pointed out any specific defect in the books nor have they rejected the explanation supported by documentary evidence.

Therefore, in the present facts and circumstances of the case we are of the considered view that merely because the volume of transactions is large, the same cannot be treated as unexplained income, particularly when the nature and source are substantiated by contemporaneous records. In view of the above, we hold that the addition of Rs.6,27,05,000/- sustained by the ld. CIT(A) u/s.69A of the Act in respect of Kotak Mahindra Bank account is not justified. Accordingly, the same is directed to be deleted.

Ground No. (b): Addition of Rs.7,04,50,000/- as unexplained credits u/s.69A of the Act – IDBI Bank Account

The AO made an addition of Rs.9,61,19,571/- as unexplained credits in the assessee’s IDBI Bank account u/s.69A of the Act. On appeal, the ld.CIT(A) partly granted relief and sustained an addition of Rs.7,04,50,000/-.

The ld.AR reiterated that full details were furnished before the lower authorities, including Party-wise statements (Table–2) showing opening balances, transactions during the year, and closing balances, confirmations, PAN details, and ledger accounts of the parties, evidence demonstrating that the accounts are running accounts with balances carried forward and settled in subsequent years.

It was further submitted that the loans and advances were received from third parties and that the assessee had satisfactorily discharged the onus by proving

:-38-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 identity of the creditors through names, PANs, and addresses, genuineness of the transactions through banking channels and confirmations, creditworthiness of the creditors through financial details placed on record. Once these three conditions are fulfilled, no addition can be made either u/s.68 or u/s.69A of the Act.

We observe that the addition sustained by the ld.CIT(A) is based primarily on the bank statement without properly appreciating the nature of the transactions reflected therein. The documentary evidence placed before us clearly establishes that the impugned credits pertain to loans and advances from identifiable parties.

The ledger accounts and confirmations demonstrate that the transactions are genuine and routed through banking channels, the creditors are identifiable and traceable, the balances are part of continuing financial relationships and not unexplained one-time receipts.

It is well settled that when the assessee discharges the initial burden by establishing identity, genuineness, and creditworthiness, the onus shifts to the Department. In the present case, no contrary material has been brought on record by the AO to disprove the evidence furnished by the assessee.

Further, section 69A of the Act cannot be invoked where the money is duly recorded in the books of account and the explanation regarding its source is supported by documentary evidence.

In view of the facts, evidence, and legal position discussed above, we hold that the addition of Rs.7,04,50,000/- sustained by the ld. CIT(A) as unexplained credits in the IDBI Bank account is unsustainable in law. Accordingly, the same is directed to be deleted.

:-39-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025

In the result the appeal filed by the assessee is allowed.

a)The Addition of Rs.8,00,10,000/- as unexplained credits u/s.69A of the Act:

The AO erred in making addition as unexplained credits u/s.69A of the Act on account of total credits in Kotak Mahindra Bank account amounted to Rs.14,88,19,952/- including cash deposits of Rs.35,11,000/- which constituted redeposits out of earlier withdrawals, without considering the facts and submission of the case. Subsequently the Ld.CIT(A) erred in confirming the addition of Rs.8,00,10,000/- as unexplained credits u/s.69A of the Act without fairly considering the factual matrix of the case.

In this regard ld.AR submitted that the party wise details of Name, PAN, balances i.e., opening, closing and transaction during the year with also reference of paper book having ledgers:

Contention of the Reference of assesse Ledger copies Sn Name of the Transactions and PAN No Opening Balance Closing Balance o party during the year confirmation letters in paper book It’s running account Confirmation and for your reference Paper book 1- Surendar ledger copies attached p.g159 1. Kumar AAMPA4429K - Rs.5,00,000/-(Cr) Rs.5,00,000/-(Cr) for subsequent Ledger copy Agarwal transactions Paper book 5 p.g 376-377 It’s running account Confirmation and for your reference Paper book 1- ledger copies attached TRANSTROY Rs.4,00,00,000/- Rs.65,00,000/- Rs.4,65,00,000/- p.g 161 2. AABCT4226B for subsequent (INDIA) LTD (Cr) (Cr) (Cr) Ledger copy transactions Paper book 5 p.g 378-379 It’s running account Confirmation and for your reference Rs. 6,35,75,000/- Paper book 1- M. Sukumar ledger copies attached Rs.37,11,00,301.81 (Cr) and Rs.40,89,50,301.81 p.g 171 3. Reddy ADZPM1863H for subsequent (Cr) Rs.2,57,25,000/- (Cr) Ledger copy (Individual) transactions (Dr) Paper book 5 p.g 380-386 It’s running account Confirmation and for your reference Paper book 1- Rs.95,00,000/- ledger copies attached M. Malathy Rs.7,51,00,679.73 Rs.8,45,80,679.73 p.g 169 4. ADMPM6295Q (Cr) and for subsequent Reddy (Cr) (Cr) Ledger copy Rs.20,000/-(Dr) transactions Paper book 5 p.g 387-389

:-40-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 The ld.AR further submitted that both the authorities without considering the fact that these account balances are the running accounts of the assessee, wherein these outstanding balances are carried forward from previous years. Further, repayments of these loans and advances are made in the subsequent years (contention of the assessee in Table - 1). It is to be noted that certain loan accounts are still not closed during the impugned year, since these account balances are running accounts which can be observed from the respective ledgers accounts attached (papers book 5). Hence the ld.AR submitted that these amounts cannot be made as addition by the Ld.CIT(A) for the year as unexplained credits. Further, these transactions are recorded in the books of accounts and were carried out through proper banking channel. In this regard, the assessee has relied upon the various case laws.

The ld.AR also submitted that the loans and advances are taken by the assessee from 3rd parties during the year and the details are submitted in the Paper book regarding the identity, genuineness and creditworthiness are proved by the assessee. Further, when the below conditions are satisfied, addition cannot be made u/s.68/69 of the Act:

• Identity of the creditors: Name, PAN and address of the creditor • Genuineness of the creditor: • Creditworthiness of the creditor From the above analysis it is established that all the three conditions are satisfied for the year and hence the addition made by the Ld.CIT(A) as unexplained is incorrect and against the provisions of the Act. Therefore, the ld.AR prayed to delete the addition made for the year under consideration.

b) Wrong addition amounting to Rs.11,58,03,416/- made as unexplained credits u/s.69A of the Act:

:-41-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 The AO has made addition amounting to Rs.53,01,17,402/- as unexplained credits u/s.69A of the Act without considering the facts and explanation submitted by the assessee.

Subsequently, on appeal the Ld.CIT(A) has sustained addition amounting to Rs.11,58,03,416/- as unexplained credits u/s.69A of the Act without considering the facts and explanation submitted by the assessee.

In this regard the ld.AR submitted that the party wise details of Name, PAN, balances i.e., opening, closing and transaction during the year with also reference to paper book having ledgers:

Contention of Reference of Ledger copies Name of Opening Transactions the assesse and Sno PAN No Closing Balance the party Balance during the year confirmation letters in paper book

:-42-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025

It’s running account and for Confirmation your reference Paper book 1- Archana & ledger copies Rs.26,25,000/- Rs.26,25,000/- p.g 195 1. AFGPA7811Q - Pawan attached for (Dr) (Dr) Ledger copy Kumar subsequent Paper book 5 transactions p.g 390

It’s running Confirmation account and for Paper book 1- Gulabchand your reference Rs.20,00,000/- Rs.20,00,000/- p.g 197 2. Pukraj AINPS9082R - ledger copies (Dr) (Dr) Ledger copy Surana attached for Paper book 5 subsequent p.g 391-392 transactions It’s running Confirmation account and for Paper book 1- your reference Gautham Rs.75,00,000/- Rs.75,00,000/- p.g 196 3. ACLPH8536F - ledger copies Chand Jain (Dr) (Dr) Ledger copy attached for Paper book 5 subsequent p.g 393-394 transactions Subsequently Confirmation Payment was Paper book 1- Hi-fashions made in AY Rs.21,00,000/- Rs.21,00,000/- p.g 198 4. – Kushpath AEAPA7814A - 2019-20 and the (Dr) (Dr) Ledger copy D jain balance in the Paper book 5 ledger NIL as on p.g 395 today It’s running Confirmation account and for Paper book 1- your reference K. Arvind Rs.38,50,000/- (Cr) Rs.40,00,000/- p.g 200 5. - Rs.1,50,000/- (Dr) ledger copies Reddy (Dr) Ledger copy attached for Paper book 5 subsequent p.g 396-397 transactions It’s running Confirmation account and for Paper book 1- K. Sreedhar your reference Rs.18,00,000/- (Dr) Rs.18,75,000/- Rs.36,75,000/- p.g 201 6. Reddy – AAEPK5245K ledger copies (Dr) (Dr) Ledger copy HUF attached for Paper book 5 subsequent p.g 398-399 transactions It’s running Confirmation account and for Paper book 1- Rs.3,40,00,000/ your reference M.B. Rs.2,75,64,177/- Rs.6,15,64,177/- p.g 202 7. AIIPM830P (Dr) ledger copies Anushree (Dr) (Dr) Ledger copy attached for Paper book 5 subsequent 400-401 transactions It’s running Confirmation account and for Rs.1,27,60,000/- Paper book 1- Platinum your reference Rs.56,45,79,377/- (Dr) and Rs.51,46,56,961/- p.g 204 8. Holdings AADCP8781D ledger copies (Dr) Rs.6,26,82,416/- (Dr) Ledger copy Ltd attached for (Cr) Paper book 5 subsequent 402-404 transactions Subsequently Confirmation Payment was Paper book 1- made in AY Rajendra Rs.50,00,000/- Rs.50,00,000/- p.g 205 9. ACCPA8920D - 2023-24 and the Agarwal (Dr) (Dr) Ledger copy balance in the Paper book 5 ledger NIL as on 405 today

:-43-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 It’s running Confirmation account and for Paper book 1- SSM your reference Rs.2,20,00,000/- Rs.2,40,00,000/- Rs.4,40,00,000/- p.g 207 10. Ahmed ABHPH5782J ledger copies (Dr) (Dr) (Dr) Ledger copy Hussain attached for Paper book 5 subsequent 406-407 transactions Subsequently Confirmation Payment was D. Paper book 1- Rs.63,000/- (Dr) made in AY Bhagchand p.g 208 11. AABHD0079H Rs.7,21,000/- (Cr) and Rs.7,00,000/- (Cr) 2020-21 and the Pokama & Ledger copy Rs.42,000/- (Cr) balance in the Sons Ltd Paper book 5 ledger NIL as on 408 today

The ld.AR further submitted that both the authorities without considering the fact that these account balances are the running accounts of the assessee, wherein these outstanding balances are carried forward from previous years. Further, repayments of these loans and advances are made in the subsequent years (contention of the assessee in Table 2. It is to be noted that certain loan accounts are still not closed during the impugned year, since these account balances are running accounts which can be observed from the respective ledgers accounts attached (papers book 5). Hence the ld.AR submitted that these amounts cannot be made as addition by the Ld.CIT(A) for the year as unexplained credits. Further, these transactions are recorded in the books of accounts and were carried out through proper banking channel. In this regard, the assessee has relied upon the various case laws.

Further the ld.AR submitted that due to a clerical mistake, party named ‘Platinum holdings Private Limited’ account classified under the head “investments” instead of “loans and advances (Asset)” in the balance sheet of the HUF. However, the Ld.CIT(A) in its order passed on 20.03.2025, has accepted the same and treated the said amount as Loans and Advances by deleting the Addition made by the AO. The relevant extract is provided below-

“In this regard, it is noted from the assessment order and the submissions of the appellant that the AO had made addition of Rs.57,38,29,877/- on account of the

:-44-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 investments in shares appearing in the books of accounts, whereas only Rs.1,54,63,996/- is the correct amount of investments in shares pertaining to the year under consideration. This fact has been verified by the AO during the remand proceedings. Hence, the investment of Rs.1,54,63,996/- in shares made during the year alone can be considered while making addition u/s 69 of the Act for the year under consideration and the balance of Rs.55,83,65,881/- is to be deleted.”

Therefore, the ld.AR prayed to delete the addition made for the year under consideration. The Ld.CIT(A) has made addition amounting to Rs.11,58,03,416/- as unexplained credits u/s.69A of the Act without considering the facts and explanation of the case.

b) Wrong addition amounting to Rs.1,54,63,996/- as unexplained investments for the investments in shares and securities:

The AO has erred in making addition as undisclosed income u/s.69 of the Act in investment in shares and securities amounting to Rs.57,38,29,877/- without considering the facts of the case.

In this regard the ld.AR submitted that the actual amount of “Investments” are amounting to Rs.1,54,63,996/- and “Loans and Advances” provided by the assessee was amounting to Rs.55,83,65,881/-.

In this regard the AO has requested to provide the details of the Investments in Shares and securities and income earned from those investments in the year under consideration during the assessment proceedings.

In response to the above the assessee submitted that all these shares were acquired in earlier years and the same have been reflected in the return of income filed by the assessee for all the earlier years. However, the AO without considering the fact that these balances has been carried forwarded from the earlier years, made an addition u/s.69 of the Act.

:-45-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025

In this regard we would like to submit that the yearly wise details of Investments i.e., opening, closing and Investments during the year.

Tra Tra Tra Tra nsa nsa nsa nsa ctio Closing Balance ctio Closing Balance ctio Closing Balance as ctio ns as on 31-03-15/ ns as on 31-03-16/ ns Opening Balance on 31-03-14/ ns Closing Balance Sno Name of the party dur Opening dur Opening dur as on 01-04-13 Opening Balance duri as on 31-03-17 ing Balance as on 01- ing Balance as on 01- ing as on 01-04-14 ng the 04-15 the 04-16 the the yea yea yea year r r r Alfavision P 1 - - 51,000/- 51,000/- 51,000/- - 51,000/- - 51,000/- Ltd (shares) Bathina tech India 2 9,00,000/- - 9,00,000/- - 9,00,000/- - 9,00,000/- - 9,00,000/- Ltd (Srico) (shares) DCM Hyundai 3 25,000/- - 25,000/- - 25,000/- - 25,000/- - 25,000/- Ltd (shares) Irmac services 4 4,23,035/- - 4,23,035/- - 4,23,035/- - 4,23,035/- - 4,23,035/- India Ltd(shares) MSR Construction 5 9,67,780/- - 9,67,780/- - 9,67,780/- - 9,67,780/- - 9,67,780/- P Ltd (shares) MSR Construction 6 26,500/- - 26,500/- - 26,500/- 26,500/- 26,500/- P Ltd - - (shares) MS Reddy Estates 7 11,15,860/- - 11,15,860/- - 11,15,860/- P Ltd - 11,15,860/- - 11,15,860/- (shares) MS Reddy Estates 8 1,00,000/- - 1,00,000/- - 1,00,000/- - 1,00,000/- - 1,00,000/- P Ltd (shares) MSR Krishna 9 1,00,000/- - 1,00,000/- - 1,00,000/- - 1,00,000/- - 1,00,000/- Estates P Ltd (Shares) Object Information 10 1,00,000/- - 1,00,000/- - 1,00,000/- - 1,00,000/- - 1,00,000/- Technology (shares) RAS & Infotech 11 22,50,000/- - 22,50,000/- - 22,50,000/- - 22,50,000/- - 22,50,000/- LTD (SHARES) Resicon Estates (P) 12 4,48,300/- - 4,48,300/- - 4,48,300/- - 4,48,300/- - 4,48,300/- LTD(Shares) Resicon Estates (P) 13 - - 2,00,000/- 2,00,000/- 2,00,000/- - 2,00,000/- - 2,00,000/- LTD(Shares) SEC-BAD 14 2,010/- - 2,010/- - 2,010/- - 2,010/- - 2,010/- Mercantile CO- OP.BANK(Shares) Jayam Infrastructures 15 14,900/- - 14,900/- - 14,900/- - 14,900/- - 14,900/- P.Ltd Share Application Money S.P.Software 16 25,00,000/- - 25,00,000/- - 25,00,000/- - 25,00,000/- - 25,00,000/- Private LTD (Shares)

:-46-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 S.P.Software 10,00,000/- 10,00,000/- 10,00,000/- 17 - - - 10,00,000/- - 10,00,000/- Private LTD (Shares) SR Krishna Estates 18 27,38,961/- - 27,38,961/- - 27,38,961/- - 27,38,961/- - 27,38,961/- P L.(Shares) Sukven 19 24,00,200/- - 24,00,200/- - 24,00,200/- - 24,00,200/- - 24,00,200/- Infrastructure Pvt Ltd(Shares) The Mahangar 20 450/- - 450/- - 450/- - 450/- - 450/- CO-OP.Urban Bank(Shares) Zen Soft Solutions 21 1,00,000/- - 1,00,000/- - 1,00,000/- 1,00,000/- 1,00,000/- - - LTD.(Shares)

Further, the ld.AR submitted that it is pertinent to note that the Assessee has provided all the necessary documentation before the ld.CIT(A), which clearly substantiates that these investments in shares amounting to Rs.1,54,63,996/- were purchased in the earlier years. However, the ld.CIT(A) has erroneously confirmed the addition made by the AO without considering the facts and made the addition of Rs.1,54,63,996/-.

However, the AO erred in making addition of these investments as income for the year under consideration on the ground that the assessee did not furnish evidence to substantiate the source of investment in shares and securities.

Additionally, in respect to the ‘Loans and Advances’ provided by the Assessee the ld.AR submitted that during the year the Assessee has provided Loans and Advances to the various parties amounting to Rs.55,83,65,881/-. In this regard the ld.AR submitted that the yearwise details of Loans and Advances provided by the assessee from the FY 2013-14 to FY 2016-17.

:-47-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 Closing Closing Closing Balance as Transacti Balance as Balance as S Opening Transaction Transaction Transactio Closing Name of on 31-03-14/ ons on 31-03-15/ on 31-03-16/ n Balance as s during the s during the ns during Balance as the party Opening during Opening Opening o on 01-04-13 year year the year on 31-03-17 Balance as the year Balance as Balance as on 01-04-14 on 01-04-15 on 01-04-16 Anush Infra 1 structure 2,10,90,000/- - 2,10,90,000/- 45,60,000 16530000/- - 16530000/- - 16530000/- Pvt Ltd Emrald 2 Realty Pvt 1,12,42,140/- - 1,12,42,140/- - 1,12,42,140 - 1,12,42,140/- - 1,12,42,140/- Ltd

Platinum 3 Holdings 45,98,23,543/- 6,30,02,200/- 52,28,25,743/- 66,91,366/- 51,61,34,377/- 4,84,45,000/- 56,45,79,377/- 4,99,22,416/- 51,46,56,961/- Pvt Ltd Ruby 4 Realty Pvt 31,88,280/- - 31,88,280/- - 31,88,280/- - 31,88,280/- - 31,88,280/- Ltd Sukven infra 5 1,25,10,000/- - 1,25,10,000/- - 1,25,10,000 - 1,25,10,000/- - 1,25,10,000/- structure - Investment

The AO has erred in considering the fact that an amount of Rs.57,38,29,877/- as

investments, without appreciating that the actual amount of investments made by the assessee in shares and securities is only Rs.1,54,63,996/- and the balance

amount represents loans and advances extended by the assessee, amounting to

Rs.55,83,65,881/-, which have been duly recorded and substantiated in the books

of accounts.

Since the loans and advances granted by the assessee have been duly examined

and accepted by the ld.CIT(A), and the same have been taken into consideration

during the appellate proceedings, the addition made by the AO is invalid and

hence prayed to delete the same.

Per contra the ld.DR relied on the orders of the Assessing Officer as well as the

ld.CIT(A) and prayed for confirming the ld.CIT(A) order in respect of the sustained

creditors as unexplained credits.

:-48-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 12. Our Findings and Adjudication - A.Y.2017-18:

We have heard the rival submissions, carefully perused the orders of the Assessing Officer and the ld.CIT(A), examined the paper books placed on record, and considered the judicial precedents relied upon by both parties.

Ground (a): Addition of Rs.8,00,10,000/- as unexplained credits u/s.69A of the Act – Kotak Mahindra Bank Account:

The Assessing Officer treated total credits amounting to Rs.14,88,19,952/- appearing in the Kotak Mahindra Bank account of the assessee, including cash deposits of Rs.35,11,000/-, as unexplained and made an addition u/s.69A of the Act. On appeal, the ld.CIT(A) granted partial relief but sustained an addition of Rs.8,00,10,000/- as unexplained credits.

We note that the ld. AR submitted the complete party-wise details including name, PAN, opening balance, transactions during the year and closing balance were furnished (Table (supra)) and also submitted that the impugned balances are running accounts, with opening balances carried forward from earlier years. The repayments have been made in subsequent years and certain accounts remained outstanding at year-end and all transactions were routed through banking channels and duly recorded in the books of account. The loans and advances were received from identifiable third parties, and the assessee has discharged the onus of proving identity, genuineness, and creditworthiness.

We find that the ld. CIT(A) has confirmed the addition without properly appreciating the fundamental nature of the transactions. The documentary evidence placed before us, including ledger accounts and confirmations, clearly establishes that the credits are part of continuing financial arrangements.

:-49-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025

The fact that the opening balances are brought forward, transactions are recorded in the books, repayments extend beyond the year, and no defect in books has been pointed out, clearly demonstrates that these are not unexplained credits falling within the ambit of section 69A of the Act. It is well settled that section 69A of the Act can be invoked only when money is found to be not recorded in the books of account and no satisfactory explanation is offered.

Once the assessee has explained the nature and source of the credits with supporting documentary evidence, the burden shifts to the Revenue, which has not been discharged in the present case.

Accordingly, we hold that the addition of Rs.8,00,10,000/- sustained by the ld.CIT(A) u/s.69A of the Act is unsustainable and the same is deleted.

b) Addition of Rs.11,58,03,416/- as unexplained credits u/s.69A of the Act:

The AO made an addition of Rs.53,01,17,402/- as unexplained credits. The ld.CIT(A) restricted the addition to Rs.11,58,03,416/- in respect of the following parties

Contention of Reference of Ledger copies Name of Opening Transactions the assesse and Sno PAN No Closing Balance the party Balance during the year confirmation letters in paper book It’s running account and for Confirmation your reference Paper book 1- Archana & ledger copies Rs.26,25,000/- Rs.26,25,000/- p.g 195 1. Pawan AFGPA7811Q - attached for (Dr) (Dr) Ledger copy Kumar subsequent Paper book 5 transactions p.g 390

It’s running Confirmation account and for Paper book 1- Gulabchand your reference Rs.20,00,000/- Rs.20,00,000/- p.g 197 2. Pukraj AINPS9082R - ledger copies (Dr) (Dr) Ledger copy Surana attached for Paper book 5 subsequent p.g 391-392 transactions Gautham Rs.75,00,000/- Rs.75,00,000/- It’s running 3. ACLPH8536F - Confirmation Chand Jain (Dr) (Dr) account and for

:-50-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025

your reference Paper book 1- ledger copies p.g 196 attached for Ledger copy subsequent Paper book 5 transactions p.g 393-394 Subsequently Confirmation Payment was Paper book 1- Hi-fashions made in AY Rs.21,00,000/- Rs.21,00,000/- p.g 198 4. – Kushpath AEAPA7814A - 2019-20 and the (Dr) (Dr) Ledger copy D jain balance in the Paper book 5 ledger NIL as on p.g 395 today It’s running Confirmation account and for Paper book 1- your reference K. Arvind Rs.38,50,000/- (Cr) Rs.40,00,000/- p.g 200 5. - Rs.1,50,000/- (Dr) ledger copies Reddy (Dr) Ledger copy attached for Paper book 5 subsequent p.g 396-397 transactions It’s running Confirmation account and for Paper book 1- K. Sreedhar your reference Rs.18,00,000/- (Dr) Rs.18,75,000/- Rs.36,75,000/- p.g 201 6. Reddy – AAEPK5245K ledger copies (Dr) (Dr) Ledger copy HUF attached for Paper book 5 subsequent p.g 398-399 transactions It’s running Confirmation account and for Paper book 1- Rs.3,40,00,000/ your reference M.B. Rs.2,75,64,177/- Rs.6,15,64,177/- p.g 202 7. AIIPM830P (Dr) ledger copies Anushree (Dr) (Dr) Ledger copy attached for Paper book 5 subsequent 400-401 transactions It’s running Confirmation account and for Rs.1,27,60,000/- Paper book 1- Platinum your reference Rs.56,45,79,377/- (Dr) and Rs.51,46,56,961/- p.g 204 8. Holdings AADCP8781D ledger copies (Dr) Rs.6,26,82,416/- (Dr) Ledger copy Ltd attached for (Cr) Paper book 5 subsequent 402-404 transactions Subsequently Confirmation Payment was Paper book 1- made in AY Rajendra Rs.50,00,000/- Rs.50,00,000/- p.g 205 9. ACCPA8920D - 2023-24 and the Agarwal (Dr) (Dr) Ledger copy balance in the Paper book 5 ledger NIL as on 405 today It’s running Confirmation account and for Paper book 1- SSM your reference Rs.2,20,00,000/- Rs.2,40,00,000/- Rs.4,40,00,000/- p.g 207 10. Ahmed ABHPH5782J ledger copies (Dr) (Dr) (Dr) Ledger copy Hussain attached for Paper book 5 subsequent 406-407 transactions Subsequently Confirmation Payment was D. Paper book 1- Rs.63,000/- (Dr) made in AY Bhagchand p.g 208 11. AABHD0079H Rs.7,21,000/- (Cr) and Rs.7,00,000/- (Cr) 2020-21 and the Pokama & Ledger copy Rs.42,000/- (Cr) balance in the Sons Ltd Paper book 5 ledger NIL as on 408 today

:-51-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 We find that the ld. AR submitted the impugned balances represent loans and advances received through banking channels. The party-wise confirmations, PAN details, and ledger accounts were furnished and also stated that these are running accounts with balances carried forward and settled in subsequent years. The addition in respect of Platinum Holdings Private Limited arose due to a clerical classification error, which was already accepted by the ld.CIT(A) in respect of investments. Further, all three conditions like identity, genuineness, and creditworthiness stand satisfied.

We observe that the ld.CIT(A), while accepting the explanation of the assessee in respect of misclassification of investments, has still sustained the addition of Rs.11,58,03,416/- without assigning cogent reasons. The evidence on record clearly shows that the creditors are identifiable, transactions are genuine and through banking channels, balances are reflected in the books and carried forward.

The mere presence of credits in the bank account cannot be a ground for invoking section 69A of the Act, when the same are duly recorded and explained. Further, clerical or classification errors cannot give rise to additions when the substantive nature of the transaction is explained and accepted.

In view of the above, we direct for deletion of the addition of Rs.11,58,03,416/- sustained by the ld. CIT(A). This ground of appeal is allowed.

c) Addition of Rs.1,54,63,996/- as unexplained investments u/s.69 of the Act – Shares and Securities:

The AO treated Rs.57,38,29,877/- as unexplained investments u/s.69 of the Act. The ld.CIT(A) deleted Rs.55,83,65,881/- holding it to be loans and advances and sustained Rs.1,54,63,996/- as unexplained investments.

:-52-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 We note that the ld. AR submitted that the Investments in shares amounting to Rs.1,54,63,996/- were acquired in earlier years. These investments were duly reflected in earlier years’ returns. The ld.AR also took us through the year-wise details of investments and loans and advances were furnished and no fresh investment was made during the year under consideration.

We find that the ld.CIT(A) has already accepted the assessee’s contention that the bulk of the amount represents loans and advances. As regards the balance Rs.1,54,63,996/-, the assessee has furnished documentary evidence demonstrating that these investments pertain to earlier years.

Once it is established that no investment was made during the year, and balances were merely carried forward, the provisions of section 69 of the Act cannot be invoked. The Revenue has not brought any material on record to rebut the assessee’s explanation. Accordingly, the addition of Rs.1,54,63,996/- sustained by the ld. CIT(A) u/s.69 of the Act is deleted.

In the result the appeal of the assessee is allowed.

a) The ld.CIT(A) has erred in deleting the rental receipts of Rs.1,91,37,917/-:

The ld.DR for the revenue submitted that the ld.CIT(A) has erred in considering the submissions made by the assessee and deleted the rental receipts to the tune of Rs.1,91,37,917/- by sustaining Rs.15.79 Lakhs as rental receipts for the impugned A.Y.2015-16. The ld.DR prayed for upholding the order of the Assessing Officer in respect of Rental income.

:-53-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 Per contra, the ld.AR submitted that though the ld.CIT(A) has deleted the Rental deposit collected in advance from the rental income added by the AO, the deposit amount has been added to the income as stated by the ld.CIT(A) in his order extracted below:

“7.5.4. I have perused the assessment order, written submissions, remand report and rejoinder to remand report. On perusal of the assessment order, it is noted that in the bank transaction summary submitted by the appellant during the assessment proceedings, the following amounts were shown as rental receipts:

Particulars Amount (in Rs.) Kotak Bank Rental Receipts 18,03,566 Rental advance received during the year from 1,29,21,778 Janakiram Co-owners IDBI Bank Rental advance received from JRC (Janakiram 56,16,466 Co-owners) TOTAL 2,03,41,810 With regard to the rental receipts of Rs. 18,03,566/-, the AO has stated in the remand report that the same has been duly declared in the return of income after claiming the standard deduction @ 30%. The issue left to be decided in this appeal is with regard to the receipt of alleged rental advance of Rs.1,85,38,244/- (Rs.1.29.21,778 + Rs.56,16,466). Out of the total rental advance of Rs.1,85,38,244/-, an amount of Rs. 1,70,89,288 is claimed to have been received from M/s Bharti Airtel Limited and the remaining balance of Rs.14,48,596/- claimed to have been received from other tenants. In this regard, it is found that the appellant could not furnish any details of tenants who had advanced Rs. 14,48,596/- either in the course of assessment or appeal proceedings.

7.5.5. Further, the appellant had claimed that an amount of Rs.1,87,62,010/-was received from M/s. Janaki Rama Co-owners towards rental advance as submitted in the appeal proceedings. It was also submitted by the appellant that out of Rs.1,87,62,010/-, an amount of Rs.1,70,89,288/- pertains to rental advance received from M/s Bharti Airtel Limited through M/s. Janaki Rama Co-owners during the year under consideration and also claimed that the rental advance cannot be taxed as rental receipts. In this regard, the submission of the appellant and the finding of the AO in the remand report for the year under consideration and also for the AY 2017-18 are considered. On perusal of the same, it is noted that the appellant had initially held 2.5% co-ownership in M/s. Janaki Rama Co-owners whereas its share has been increased to 27.5% on the basis of the amended partnership deed of M/s Janaki Rama Co-owners dated 06.06.2014. It is also found that M/s Janaki Rama Co-owners had entered into a rental agreement with M/s. Bharti Airtel Limited for letting out its property in Splendid

:-54-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 Towers, Hyderabad for which monthly rent of Rs.42,69,520/- is payable to the confirming party i.e. M/s Janaki Rama Co-owners and M. Sukumar Reddy, in advance on or before 10th of each month. Further, it is also noted that for the year under consideration, the appellant is having 27.5% share in M/s Janaki Rama Co-owners. Thus, it is concluded that out of the rent received from all the four tenants, the appellant is entitled as per the amended partnership deed dated 06.06.2014 @ 27.5% of the rent received during the year under consideration. Further, it is also noted that the amount received by the appellant from M/s Janaki Rama Co-owners is a consolidated amount without specifically being related to a particular tenant. Since the amount received from M/s Janaki Rama Co-owners is in relation to all four tenants for the year under consideration, the rental receipts offered by the appellant @2.5% share is not as per the share of the appellant in M/s Janaki Rama Co-owners. Hence, it is concluded that the amount of rental receipts to be offered from all the tenants is to be adopted @ 27.5%. Accordingly, the gross rental receipts for the year under consideration is reworked as under:

SI Tenant Rent Period of No. Total Rent Appellant's . Name Month tenancy of received by share @ N Mont Janaki Rama 27.5% O hs of Co-owners tena ncy

1 Bharti 42,69,520 Sep, 2014 to 7 2,98,86,640 82,18,826 Airtel Ltd Mar, 2015

2 ABB India 4,66,623 Oct, 2014 to 6 27,99,738 7,69,928 Ltd Mar, 2015

3 Intergraph 5,92,000 Apr, 2014 to 12 71,04,000 19,53,600 India Ltd Mar, 2015

4 Share 6,29,000 Apr, 2014 to 12 75,48,000 20,75,700 Microfin 12 Mar, 2015 Ltd

Total 4,73,38,378 1,30,18,054

7.5.6. Accordingly, the said credits of Rs.2,03,41,810/- categorized by the appellant as 'rental receipts' can be bifurcated as under:

Total credits in bank account claimed as Rs.2,03,41,810/- rental receipts/advances Amount received from M/s Janakiram Co- Rs.1,30,18,054/- owners to be considered under the head 'Income from House Property' Rs.1,87,62,010/-

:-55-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 Amount received from M/s Janakiram Co- Rs.57,43,956/- owners to be considered as rental advance/deposit

Balance amount not explained to be Rs. 15,79,800/- considered as unexplained credits On the basis of the above discussion, it is held that out of total credits of Rs.2.03,41,810/- categorized as 'Rental Receipts', the appellant could not explain the source for an amount of Rs. 15,79,800/-, which is to be considered as unexplained credits in bank account of the appellant. Further, it is also held that out of Rs.1,87,62,010/- received from M/s Janakiram Co- owners, an amount of Rs.1,30,18,054/- is to be treated as gross rental receipts for the year under consideration for the purpose of working out the income from house property after allowing the eligible deduction u/s 24 of the Act and the balance amount of Rs.57,43,956/- is held to be rental advance received from the said party. Hence, the AO is directed to delete the addition to the tune of Rs. 1,30,18,054/- & Rs.57.43,956/-and thereafter consider the amount of Rs.1,30,18,054/- as gross rental receipts from house property and tax accordingly.”

Therefore, the contentions raised in our grounds of appeal for the A.Y.2015-16 is to be considered and the grounds of appeal of the revenue may please be dismissed as there is no relief given by the ld.CIT(A).

b) The ld.CIT(A) has erred in deleting the cash deposit of Rs.28,30,000/-:

The ld.DR assailing the action of the ld.CIT(A) submitted that without any evidence provided by the assessee, the ld.CIT(A) has erred in deleting the cash deposit as it was made out of explained sources. Therefore, the ld.DR prayed for confirming the order of the Assessing Officer in this respect by allowing the corresponding ground of appeal of the revenue.

Per contra, the ld.AR argued that the income disclosed in the return of income and the cash flow statement along with the financial statements of the assessee has clearly established the source for cash deposit made to the bank account. Hence prayed for upholding the order of the ld.CIT(A).

:-56-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 c) The ld.CIT(A) has erred in deleting the addition of Rs.45,00,000/- which has been transferred from individual accounts:

The ld.DR assailing the action of the ld.CIT(A) submitted that without any evidence provided by the assessee, the ld.CIT(A) has erred in deleting the the addition of Rs.45.00 Lakhs which has been transferred from the individual accounts to the assessee (HUF) accounts as explained source. Therefore, the ld.AR prayed for confirming the order of the Assessing Officer in this respect by allowing the corresponding ground of appeal of the revenue.

Per contra, the ld.AR argued that the return of income and the financial statements of the Individual have been placed on record along with the corresponding bank statements of the individual to establish the genuineness of the transactions between individual and HUF. Hence, the ld.CIT(A) has rightly accepted the transaction / transfers are explained and deleted the impugned addition. Hence prayed for upholding the order of the ld.CIT(A) in this regard.

a) Deletion of addition of Rs.1,91,37,917/- towards rental receipts:

The Assessing Officer treated the entire amount of Rs.1,91,37,917/- credited in the bank accounts as unexplained rental income. The ld.CIT(A), after detailed examination of bank statements, lease agreements and explanations furnished, restricted the taxable rental income and deleted the balance amount by holding that a substantial portion represented advance rental deposits, particularly received from Bharti Airtel Ltd.

Before us, the ld.DR could not controvert the factual finding recorded by the ld. CIT(A) that the advance rental receipts were not income accrued for the year under consideration and the assessee had offered such advance rental receipts

:-57-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 to tax in subsequent assessment years, which fact is borne out by the returns of income placed on record.

We find that the ld.CIT(A) has not granted any undue relief to the assessee. On the contrary, the ld.CIT(A) had sustained a part of the rental income which is questioned by the assessee in its appeal (supra) and the same has been deleted by us in ITA No.991/Chny/2025.

It is a settled principle of law that advance receipts cannot be taxed unless income accrues or arises, and further, the same income cannot be taxed twice. This position is well supported by judicial precedents, including the decision of the Hon’ble Supreme Court in Berger Paints India Ltd. and the Hon’ble Bombay High Court in Skyline Great Hills.

Accordingly, we find no infirmity in the order of the ld.CIT(A). The ground raised by the Revenue is devoid of merit and is dismissed.

b) Deletion of cash deposits of Rs.28,30,000/-:

The AO treated the cash deposits of Rs.28,30,000/- as unexplained on the ground that no proper explanation was offered. The ld.CIT(A), however, deleted the addition after considering the cash flow statement of the assessee the income declared in the return of income and the availability of sufficient cash balance arising from disclosed sources.

Before us, the ld. DR could not point out any specific defect in the cash flow statement or demonstrate that the explanation furnished by the assessee was incorrect or implausible. Merely alleging lack of evidence without rebutting the documentary material on record cannot justify sustaining an addition.

:-58-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 It is well settled that once the assessee explains the source of cash deposits with supporting material, the onus shifts to the Revenue. In the present case, the Revenue has failed to discharge this burden.

Therefore, we uphold the finding of the ld. CIT(A) and dismiss Ground of appeal of the Revenue.

c) Deletion of addition of Rs.45,00,000/- transferred from individual accounts:

The AO treated the sum of Rs.45,00,000/- transferred from individual accounts to the HUF as unexplained. The ld.CIT(A) deleted the addition after recording a clear finding that the individual (Karta/member) had sufficient explained sources, copies of individual returns of income, financial statements and bank statements were furnished and the transactions were routed through banking channels and were duly reflected in the books.

Before us, the ld. DR has not disputed the identity of the individual, nor the genuineness of the bank transactions, nor the creditworthiness of the individual. In absence of any adverse material, the addition cannot be sustained merely on suspicion.

It is a settled legal position that transfers between individual and HUF accounts, when properly explained and supported by evidence, cannot be treated as unexplained income.

We therefore find no error in the order of the ld. CIT(A) in deleting the addition of Rs.45,00,000/-. Hence, the ground raised by the Revenue is accordingly dismissed.

:-59-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 a) The ld.CIT(A) has erred in deleting the cash deposit of Rs.35,11,000/-:

The ld.DR assailing the action of the ld.CIT(A) submitted that without any evidence provided by the assessee, the ld.CIT(A) has erred in deleting the cash deposit was made out of explained sources. Therefore, the ld.DR prayed for confirming the order of the Assessing Officer in this respect by allowing the corresponding ground of appeal of the revenue.

Per contra, the ld.AR argued that the income disclosed in the return of income and the cash flow statement along with the financial statements of the assessee has clearly established the source for cash deposit made to the bank account. Hence prayed for upholding the order of the ld.CIT(A).

b) The ld.CIT(A) has erred in deleting the addition of Rs.57,38,29,877/- on account of unexplained investments:

The ld.DR, assailing the impugned order passed by the ld.CIT(A), vehemently contended that the ld. CIT(A) has erred both on facts and in law in deleting the addition made by the AO u/s.69 of the Act on account of alleged undisclosed investment in shares and securities amounting to Rs. 57,38,29,877/-. It was submitted that the ld. CIT(A), without properly appreciating the factual matrix of the case and without calling for or verifying any cogent documentary evidence, accepted the explanation of the assessee and deleted the substantial addition. The ld. DR thus prayed that the order of the AO, having been passed after due examination of the records and in accordance with the provisions of section 69 of the Act, be restored.

Per contra, the ld.AR for the assessee supported the findings of the ld. CIT(A) to the extent of relief granted and submitted that the addition was made by the AO on a complete misappreciation of the financial statements. It was contended that on a perusal of the audited financial statements placed before the ld. CIT(A), it

:-60-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 was evident that an amount of Rs.55,83,65,881/- represented “Loans and Advances – Assets” granted to various parties in earlier assessment years and carried forward from Financial Years 2013-14 to 2016-17. During the year under consideration, these amounts were merely regrouped and reflected under the head “Shares and Securities” in the balance sheet, without there being any fresh investment to that extent during the relevant previous year.

The ld. AR further submitted that detailed year-wise break-up of loans and advances granted by the assessee during the aforesaid financial years was duly furnished before the ld. CIT(A), along with supporting documents and audited accounts, thereby establishing that the said sum of Rs. 55,83,65,881/- did not represent any unexplained investment during the year under appeal. Upon verification of these details, the ld. CIT(A) rightly deleted the addition to that extent.

It was further submitted that out of the total addition of Rs. 57,38,29,877/-, the ld. CIT(A) sustained an addition of Rs. 1,54,63,996/-, which according to the assessee, was also unsustainable in law and on facts. The ld. AR contended that even the said amount represented investments in shares made in earlier years and duly reflected in the books of account. It was argued that all relevant documentary evidence substantiating the source and timing of such investments had been placed before the ld. CIT(A). However, without properly appreciating the evidences on record, the ld. CIT(A) erroneously confirmed the addition to the extent of Rs. 1,54,63,996/-.

The ld.AR emphasized that the AO proceeded on an incorrect premise by treating the entire sum of Rs. 57,38,29,877/- as fresh investment made during the year under consideration, whereas in reality, the actual investment in shares and securities attributable to the relevant period was only Rs. 1,54,63,996/-, and even that amount pertained to earlier years. The balance amount of Rs. 55,83,65,881/-

:-61-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 merely represented loans and advances extended in preceding years, which were duly recorded in the regular books of account and substantiated through audited financial statements.

It was thus submitted that once the major component of Rs. 55,83,65,881/- has been examined and accepted by the ld. CIT(A) as explained and duly recorded in the books, and the same forms part of carried-forward balances from earlier years, the very foundation of the addition under section 69 of the Act collapses. In the absence of any material to demonstrate that the impugned amounts represented unexplained investments made during the year under consideration, the addition made by the AO is liable to be deleted in toto. The ld. AR accordingly prayed that not only the relief granted by the ld. CIT(A) be upheld, but also the balance addition of Rs. 1,54,63,996/- sustained by the ld. CIT(A) be deleted.

a) Deletion of cash deposit of Rs.35,11,000/-:

Upon careful consideration of the material available on record, we observe that the Ld.CIT(A) has adjudicated the issue after duly examining the cash flow statement, the income disclosed in the return of income, and the relevant financial statements placed before him. The ld.CIT(A) has recorded a categorical finding that the addition made by the AO was not sustainable in view of the documentary evidence and explanations furnished by the assessee.

It is pertinent to note that the Revenue, in the course of appellate proceedings before us, has not brought on record any cogent material or fresh evidence to controvert the factual findings recorded by the ld.CIT(A). No infirmity in the appreciation of facts, nor any legal error in the reasoning adopted by the ld.CIT(A), has been demonstrated by the Revenue. In the absence of any contrary

:-62-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 evidence or specific rebuttal to the findings so recorded, we see no justification to interfere with the well-reasoned order of the ld.CIT(A).

Accordingly, we uphold the order of the ld.CIT(A) deleting the addition in question. The ground raised by the Revenue stands dismissed.

b) Deletion of addition of Rs.57,38,29,877/- as unexplained investments:

We have carefully considered the rival submissions and perused the material available on record, including the assessment order, the impugned order of the ld. CIT(A), the remand report of the AO, and the financial statements of the assessee.

The primary grievance of the Revenue is against the action of the ld.CIT(A) in deleting the addition of Rs.55,83,65,881/- and in granting substantial relief to the assessee.

Upon perusal of the audited financial statements, it is observed that an amount of Rs.55,83,65,881/- was reflected in the balance sheet under the head “Loans and Advances – Assets”, representing amounts advanced to various parties in earlier years and carried forward to the year under consideration. It is an admitted position on record that during the relevant assessment year, these amounts were regrouped and disclosed under the head “Shares and Securities”. The assessee, through the ld. AR, had furnished year-wise details of such loans and advances extended during Financial Years 2013-14 to 2016-17, along with supporting documentary evidences, to substantiate that the said amounts did not pertain to fresh investments made during the year under appeal.

We find that the ld. CIT(A), after calling for a remand report and examining the evidences placed on record, recorded a categorical finding that the sum of Rs.55,83,65,881/- represented loans and advances carried forward from earlier

:-63-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 years and not investments made during the year. The Revenue has not brought any material before us to controvert this factual finding of the ld.CIT(A). Therefore, the deletion of the addition to the extent of Rs.55,83,65,881/- does not call for interference.

With regard to the balance addition of Rs.1,54,63,996/-, which has been sustained by the ld.CIT(A), we note that the assessee has contended that even these investments in shares were made in earlier years and merely continued previous year balances in the books during the year under consideration. The assessee had furnished necessary documentary evidence before the ld.CIT(A) in support of this claim. However, the ld.CIT(A), without properly appreciating the evidence and the factual matrix, confirmed the addition to this limited extent.

It is further observed that the AO had proceeded on an erroneous premise by treating the aggregate sum of Rs.57,38,29,877/- as investments made during the year, without appreciating that the actual investments in shares and securities amounted only to Rs.1,54,63,996/-, and that the remaining amount of Rs.55,83,65,881/- represented loans and advances duly recorded in the books of account and carried forward from earlier years. The approach adopted by the AO, therefore, suffers from a clear misappreciation of facts.

In view of the foregoing discussion, and considering that the nature and source of the loans and advances have been duly examined and accepted by the ld.CIT(A) during appellate proceedings, we find no infirmity or perversity in the findings of the ld.CIT(A) in deleting the addition of Rs.55,83,65,881/-. Consequently, the addition made by the AO, whether in respect of Rs.55,83,65,881/- or the aggregate sum of Rs.57,38,29,877/-, cannot be sustained.

:-64-: ITA Nos: 991, 992, 993, 1639 & 1644/Chny/2025 Accordingly, we uphold the order of the ld.CIT(A) to the extent it grants relief to the assessee and find no merit in the grounds raised by the Revenue. The ground of appeal of the Revenue is, therefore, dismissed.

In the result the appeal of the revenue is dismissed.

Order pronounced in the open court on 02nd March, 2026 at Chennai.

Sd/- Sd/- (एस. आर. रघुनाथा) (एस एस �व�वने� र�व) (S. R. RAGHUNATHA) (S.S. VISWANETHRA RAVI) लेखा सद�य/Accountant Member �या�यक सद�य/Judicial Member

चे�नई/Chennai, 8दनांक/Dated, the 02nd March, 2026 JPV आदेश क5 (�त:ल�प अ;े�षत/Copy to: 1. अपीलाथ'/Appellant 2. ()यथ'/Respondent 3.आयकर आयु<त/CIT– Chennai/Coimbatore/Madurai/Salem 4. �वभागीय (�त�न�ध/DR 5. गाड% फाईल/GF