ACIT, CHENNAI vs. MENAKURU SUKUMAR REDDY, CHENNAI

ITA 1639/CHNY/2025Status: DisposedITAT Chennai02 March 2026AY 2015-1664 pages

AI SummaryAllowed

Facts

The case involves a batch of appeals filed by both the assessee and the Revenue concerning assessment years 2015-16, 2016-17, and 2017-18. The Revenue's appeals had a delay of 4 days, which was condoned by the Tribunal.

Held

The Tribunal allowed the assessee's appeals, holding that certain additions made by the Assessing Officer and sustained in part by the CIT(A) were not sustainable. This included deletion of additions related to rental income, sale of land, and various credits and investments, as the assessee had provided sufficient explanation and documentation.

Key Issues

The core issues included the validity of reassessment notices, the taxability of advance rental receipts, the jurisdiction of the CIT(A) in enhancing assessments, and whether certain bank credits and investments constituted unexplained income.

Sections Cited

147, 148, 143(3), 69A, 251(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, A BENCH, CHENNAI

Before: SHRI S.S. VISWANETHRA RAVI & SHRI S. R. RAGHUNATHA

For Appellant: Shri. P. Murali Mohana Rao, CA

Hearing: 04.12.2025Pronounced: 02.03.2026

The present batch of appeals comprises to 993/Chny/2025 pertaining to the Assessment Years 2015-16, 2016-17 and 2017-18, which have been preferred by the assessee. Further, 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.

2. At the outset, we find that there is a delay of 04 days in filing the appeal by the revenue in both and the revenue explained the reasons for delay in filing the appeals. The revenue has filed affidavits stating the reasons for delay in filing the appeals is due to ‘cases having time barring date for completion of pending assessment on 31.03.2025 were to be completed and to trace the miscellaneous records of the case took some time’. Hence, the appeals could not be filed before the limitation period. After considering the affidavits filed by the revenue and also hearing both the parties, we find that there is a reasonable cause for the revenue in not filing appeals on or before the due date prescribed under the law and thus, in the interests of justice, we condone delay in filing of appeals and admit the appeals filed by the revenue for adjudication.

The brief facts of the relevant assessment years are as under:

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-:

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.

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 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 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.”

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.”

(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.”

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-:

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 387-389 991, 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.

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 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.

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 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.

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 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: