Income Tax Appellate Tribunal - Delhi
Acit, Circle- 15(2), New Delhi vs Lord Krishna Realinfra Pvt. Ltd., New ... on 18 May, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH, F: NEW DELHI
BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER
AND
SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER
ITA No.-3613/Del/2018
[Assessment Year: 2013-14]
Assistant Commissioner of M/s Lord Krishna Realinfra
Income Tax, Pvt. Ltd.,
Circle-15(2), Vs G-6/35, Sector-II, Rohini,
New Delhi. New Delhi-110085.
PAN- AABCL5083E
Revenue Assessee
Revenue by Ms. Harpreet Kaur Hansra, Sr. DR
Assessee by None
Date of Hearing 20.02.2026
Date of Pronouncement 18.05.2026
ORDER
PER BRAJESH KUMAR SINGH, AM,
This appeal by the Revenue is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-36, New Delhi, [hereinafter referred to as the 'Ld. CIT(A)] dated 14.03.2018 pertaining to Assessment Year 2013-14, arising out of Assessment order dated 31.03.2016 passed under Section 143(3) of the Income-tax Act, 1961(hereinafter referred to as 'the Act') passed the ACIT, Circle- 15(2), New Delhi, (Ld. AO', for short).
ITA No.- 3613/Del/2018 Lord Krishna Realinfra Pvt. Ltd.
2. During the course of hearing, none appeared on behalf of the assessee, nor was any application for adjournment placed on record. This case was fixed for hearing on several dates between 17.11.2021 to 13.08.2025, when on all but one occasion, the assessee appeared. The Ld. AR of the assessee appeared on 21.11.2024, when he sought adjournment. Thereafter, also the case was fixed for hearing on three more occasions, when none appeared on behalf of the assessee.
This case was last fixed on 20.02.2026 after serving notice on all the address available as per records, but again none appeared on behalf of the assessee.
Therefore, this appeal being an old appeal was heard after hearing the Revenue and on the basis of material available on record.
3. Brief facts of the case: The assessee company during the year was engaged in the business of real estate. Return declaring income of Rs. 12,50,20,046/- and deemed total income under section 115JB of Rs. 10,36,41,013/- (under MAT) was e-filed by the assessee company on 31.03.2015. The return was processed u/s 143(1) of the Act and the case was selected for scrutiny. Notice u/s 143(2) of the I.T. Act, 1961 dated 28.08.2015 was issued and served upon the assessee.
3.1 In this case, the assessee was initially represented by Shri A.L. Sehgal, Chartered Accountant / Authorized Representative (AR) of the assessee, who attended the proceedings with two attendance and furnished few details / information. Thereafter, the said AR of the assessee, vide letter dated 05.03.2016, 2 ITA No.- 3613/Del/2018 Lord Krishna Realinfra Pvt. Ltd.
withdrew his power attorney to represent the said case. Thereafter, according to the AO, none appeared on behalf of the assessee during the assessment proceedings, as per the details noted on page 2 and 3 of the assessment order.
The AO, thereafter made the following additions / disallowances in the assessment order.
Sr. Particulars Amount of Relevant para / Relief allowed
No. Addition page of by the Ld.
Assessment order CIT(A)
1 15% of Commission Rs. Para 1 of page 3 Rs.
and Brokerage out of 1,82,10,547/- 1,54,00,547/-
total commission of Rs.
12,14,03,643/- debited
in the P & L Account.
2 20% of other expenses Rs. 5717937/- Para 2 of page 3 Rs. 13,44,219/-.
as out of total expenses However, the
of Rs. 2,85,89,683/- department has
debited in the P & L accepted this
Account finding of the
Ld. CIT(A) and
has not filed any
ground of appeal
on the said relief
allowance.
3 Difference in gross Rs. Para 3 of page 3 Rs.
figure as per Form 26AS 7,72,29,746/- 7,65,65,149/-
and return filed by the
appellant
Total 10,11,58,230/- Rs.
9,33,09,915/-
4. Aggrieved with the said order, the assessee filed an appeal before the Ld. CIT(A).
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4.1 The Ld. CIT(A) called for a remand report in view of the additional evidences filed by the assessee, which was submitted by the AO vide his report dated 05.01.2017. The assessee filed a rejoinder vide letter dated 05.01.2018.
The Ld. CIT(A), after admitting the above additional evidences, allowed relief to the assessee as tabulated in para 3.1 of this order.
5. Aggrieved with the said findings of the Ld. CIT(A), the Revenue is in appeal before us and the same is discussed ground no. wise.
6. We have heard the Ld. Sr. DR, who supported the order of the AO and the grounds of appeal filed by the Revenue. The issues in the appeal are decided ground wise.
6.1 Ground no. 1 of the appeal is reproduced as under:
"1. That Ld. CIT(A) has erred in in applying Rule 46A for admission of additional evidences and ignoring fact that assessee did not fulfill the criteria laid down for acceptance of additional evidence as per Rule 46A."
6.2 The AO had opposed the admission of the additional evidence in the remand report as under:
"1) Commission expenses- The assessee has only submitted the ledger account of the commission expenses which does not in any way prove the genuineness of such expenditure. Also, the nature of services provided by parties and the expertise of such parties in proving the said services has not been explained by the assessee. Moreover, the assessee has not submitted the TDS payment challans which will prove that TDS has been deposited in respect of the commission expenses paid. If the documents were submitted before the assessing officer during the assessment proceedings the assessing officer could have made third party enquiries to establish whether the commission expenditure is genuine or not. The quantum of expenditure under commission expenses being huge l.e. Rs. 12,14,03,645/- and most of it is seen to be paid to individuals and 4 ITA No.- 3613/Del/2018 Lord Krishna Realinfra Pvt. Ltd.
HUFs, the genuineness of expenditure could not be verified during the assessment proceedings because of the non-compliance to the notices served upon the assessee.
2) Revising of TDS return by the deductor The assessee has only filed a one page documents which in no way proves that the return of the deductor has been revised in respect of the assessee company. Such evidence being incomplete is liable to be rejected.
3) Debit Note- In respect of the debit notes furnished by the assessee, it is seen that in respect of the debit note issued by M/s. Jaiprakash Associates Limited, the debit note is relating to the interest and administration charges whereas the amount credited by M/s. Jaiprakash Associates Ltd., as reflected in Form 26AS, is relating to commission paid under section 194H. The nature of two transaction being different, it is not clear whether the assessee has simultaneously made some other expenditure entry in relation to the same debit note.
.................
In view of the above facts and circumstances of the case the additional evidence under Rule 46A filed before your honor deserves to be rejected on technical as well as on merits of the issue."
(emphasis supplied by us) 6.3 The assessee had submitted the reasons for non-submission of the evidences before the AO and the Ld. CIT(A) admitted the same after forwarding it to the AO and upon considering the Remand Report filed by the AO. The relevant extract of the submission for the admissibility of the additional evidences before the Ld. CIT(A) as stated in the order of the Ld. CIT(A) is reproduced as under:
" 4.2.3 The Appellant AR has submitted a rejoinder vide letter dated 05.01.2018 which is reproduced below:
"With reference to A.O. Remand Report Dated 5.1.2017, it is hereby our rejoinder submission as under:-
1. A.O. Remand report processed without giving any single opportunity of being heart to the assessee.5
ITA No.- 3613/Del/2018 Lord Krishna Realinfra Pvt. Ltd.
2. Admission of additional evidence: during the assessment proceedings the learned Assessing Officer has not granted opportunity to the assessee. The Additional evidence not were submitted by assessee by reason of :-
1. As the notice were Issued at the address G-6/35, Sector-11, Rohini, New Delhi 110085 (which was a residence address of Mr. Babu Singh (Director), used to closed as they were shifted to C-102 Sector-39, Noida (U.P.) also corporate office address is at 207-208, JOP Plaza, Sector-18, Noida (UP). In this regard; the assessee company has not received a proper notice hereby already been submitted an affidavit! Annexure-1 Accordingly the assessee company prevented due to none receiving of notice, at the correct address which is sufficient cause from none producing these evidenced before the AO at the time of assessment.
ii. Mr. Sehgal CA/AR of the assessee company attended the proceedings for two attendance and subsequently withdrawn his power of attorney vide letter dated 05.03.2016, for which company has no information. On 28.03.2016 first time company has received notice for fixation of the mater. Immediately after, on 31.03.2016 Learned Assessing officer passed the order, without giving proper opportunity of being heart to the assessee company. It is well settled law that assessee cannot be made to suffer on account of the fault of the CA/ AR of the assessee.
Accordingly the given circumstances it is well fall within the purview for accepting additional as condition mentioned in Rule 46A(1) '(c) and (d) reproduced as under:-
(c) where the appellant was prevented by sufficient cause from producing before the Income-tax Officer any evidence which is relevant to any ground of appeal; or
(d) where the Income-tax Officer has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal.
Hence Ld Assessing Officer was Not Justified In Deciding the Case Expar-te order and also remand report, the appellant not being satisfied for the order of assessment, as in such Impugned order additions made is apparently arbitrarily and untenable without giving time and proper notice.
Considering the entirety of facts, I am requested please consider it in the Interest of justice that one more opportunity should be afforded to assessee in order to impart substantial justice to him because he was prevented by sufficient cause from producing the necessary evidence before AO.
Further as per the case law decided. Additional evidence under normal circumstances should be accepted: Smt. Prabhavati S. Shah 231 ITR 1 (Bom) reproduced as under:-
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5. On a plain reading of Rule 46A, it is clear that this rule is intended to put fetters on the right of the appellant to produce before the Appellate Assistant Commissioner any evidence, whether oral or documentary, other than the evidence produced by him during the course of the proceedings before the Income-
tax Officer, except in the circumstances set out therein. It does not deal with the powers of the Appellate Assistant Commissioner to make further enquiry or to direct the Income-tax officer to make further enquiry and to report the result of the same to him. This position has been made clear by Sub-rule (4) which specifically provides that the restrictions placed on the production of additional evidence by the appellant would not affect the powers of the Appellate Assistant Commissioner to call for the production of any document or the examination of any witness to enable him to dispose of the appeal. Under Sub-section (4) of Section 250 of the Act, the Appellate Assistant Commissioner is empowered to make such further inquiry as he thinks fit or to direct the Income-tax Officer to make further inquiry and to report the result of the same to him. Sub-section (5) of Section 250 of the Act empowers the Appellate Assistant Commissioner to allow the appellant, at the hearing of the appeal, to go into any ground of appeal not specified in the grounds of appeal, on his being satisfied that the omission of the ground from the form of appeal was not wilful. It is clear from the above provisions that the powers of the Appellate Assistant Commissioner are much wider than the powers of an ordinary court of appeal. The scope of his powers is coterminous with that of the Income- tax Officer. He can do what the Income-tax Officer can do. He can also direct the Income-tax Officer to do what he failed to do. The power conferred on the Appellate Assistant Commissioner under Sub-section (4) of Section 250 being a quasi-judicial power, it is incumbent on him to exercise the same if the facts and circumstances justify. If the Appellate Assistant Commissioner fails to exercise his discretion judicially, and arbitrarily refuses to make enquiry in a case where the facts and circumstances so demand, his action would be open for correction by a higher authority.
6. On a conjoint reading of Section 250 of the Act and Rule 46A of the Rules, it is clear that the restrictions placed on the appellant to produce evidence do not affect the powers of the Appellate Assistant Commissioner under Sub-section (4) of Section 250 of the Act. The purpose of Rule 46A appears to be to ensure that evidence is primarily led before the Income-tax Officer.
7. We are supported in our above conclusion by the decision of the Orissa High Court in B. L. Choudhury v. CIT [1976] 105 ITR 371 in which it was held (page
376):
"Wide provision has thus been made conferring jurisdiction on the first appellate authority to make such inquiry as he deems fit. The provision seems to have been based on the fact that before the Appellate Assistant Commissioner there is generally no opposite party. The appellate authority himself is the departmental authority representing the Revenue. Therefore, he has been invested with the 7 ITA No.- 3613/Del/2018 Lord Krishna Realinfra Pvt. Ltd.
power of making further Inquiry. He does not exceed his jurisdiction if he asks or allows the assessee to produce or file additional papers or additional evidence in the manner he thinks fit."
In view of the above-mentioned circumstances; It Is most respectfully prayed that please may pass such orders as your good self-consider Fit And Proper, In The Interest Of Natural Justice. Accordingly, concluded that request of assessee under Rule 46A deserved to be accepted."
6.4 The ld. CIT(A) admitted the above additional evidences by her observations in para no. 4.2.4, which is reproduced as under:
" The submission filed by the appellant for admissibility of the Additional evidence and the case laws relied upon have been considered and the additional evidence is admitted during the appellate proceedings. The Ground of Appeal are dealt with separately in the following Paras."
6.5 Thus, it is seen that the Ld. CIT(A) upon considering the above submissions of the assessee, admitted the above additional evidences filed by the assessee and also called for a remand report. The assessee explained the reasons for not filing the details before the AO during the assessment proceedings as the notices were issued at the address G-6/35, Sector-11, Rohini, New Delhi 110085 (which was a residence address of Mr. Babu Singh (Director), which used to closed as they were shifted to C-102 Sector-39, Noida (U.P.) and also the corporate office address was at 207-208, JOP Plaza, Sector-18, Noida (UP). It was submitted by the assessee that in this regard; the assessee company had not received a proper notice and had submitted an affidavit as Annexure-1 and accordingly the assessee company was prevented due to not receiving of notice, 8 ITA No.- 3613/Del/2018 Lord Krishna Realinfra Pvt. Ltd.
at the correct address which was a sufficient cause from not producing these evidenced before the AO at the time of assessment. The assessee also submitted that Mr. Sehgal CA/AR of the assessee company attended the proceedings for two attendance and subsequently withdrew his power of attorney vide letter dated 05.03.2016, for which company had no information. It was further submitted that on 28.03.2016 for the first time the assessee company had received notice for fixation of the matter and immediately after, on 31.03.2016 the Assessing officer passed the order, without giving proper opportunity of being heard to the assessee company. Further, it was submitted by the Ld. AR that no opportunity was provided by the AO to the assessee during the course of remand proceedings.
Therefore, in the given facts of the case, no interference is called for in the order of the Ld. CIT(A) in accepting the admission of the above additional evidences.
Hence, ground no. 1 of the appeal is dismissed.
7. In respect of disallowance of Rs. 1,82,10,547/-, contested by the Revenue in ground no. 2 of the appeal which is reproduced as under:
"2. The Ld. CIT(A) erred in restricting the addition to Rs. 28,10,000/- made by AO as against of Rs.182,10,547/- on account of commission paid solely on the basis of TDS returns and ignoring other corroborative factors ."
7.1 The AO made the disallowance as under:
"1. During the year the assessee has debited commission and brokerage paid amounting to Rs. 12,14,03,645/- in its P & L Account. The assessee did not provide lager account of commission paid and also not provided any bill/voucher 9 ITA No.- 3613/Del/2018 Lord Krishna Realinfra Pvt. Ltd.
in supports of its claim and therefore, 15% of Rs. 12,14,03,645/-which comes to Rs. 1,82,10,547/- is hereby disallowed."
7.2 The AO submitted his Remand Report as under:
"1) Commission expenses- The assessee has only submitted the ledger account of the commission expenses which does not in any way prove the genuineness of such expenditure. Also, the nature of services provided by parties and the expertise of such parties in proving the said services has not been explained by the assessee. Moreover, the assessee has not submitted the TDS payment challans which will prove that TDS has been deposited in respect of the commission expenses paid. If the documents were submitted before the assessing officer during the assessment proceedings the assessing officer could have made third party enquiries to establish whether the commission expenditure is genuine or not. The quantum of expenditure under commission expenses being huge i.e. Rs. 12,14,03,645/- and most of it is seen to be paid to individuals and HUFs, the genuineness of expenditure could not be verified during the assessment proceedings because of the non-compliance to the notices served upon the assessee.
2) Revising of TDS return by the deductor The assessee has only filed a one page documents which in no way proves that the return of the deductor has been revised in respect of the assessee company. Such evidence being incomplete is liable to be rejected."
7.3 The assessee submitted its rejoinder to the Remand Report as under:
" 2. Additional Evidences in respect of Grounds of Appeal-1 & 2:-disallowances by applying mechanically rate of 15% of the Commission paid Rs. 12,14,03,645/- i.e. Rs. 1,82,10,547/- without there being any basis for the same. Copy of TDS Certificate to whom duly TDS has been deducted is on record.
In the A.O. remand report has ignored and omitted the TDS Certificates. Just by giving reason that the assessee has not submitted the TDS payment challans which will prove that TDS has been deposited in respect of commission expense. Our contention is that TDS certificates duly been downloaded from NSDL sites accordingly copy of challan copy is not requires."
7.4 The ld. CIT(A) deleted the said addition and the relevant extract of the ld.
CIT(A) is reproduced as under:
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"4.4 Ground no. 2: That the learned Assistant Commissioner of Income Tax has grossly erred in making adhoc disallowance by applying mechanically rate of 15% of the Commission paid Rs. 12,14,03,645/- i.e. Rs. 1,82,10,547/-without there being any basis for the same.
4.4.1 The AR has submitted that:
"That the learned Assessing Officer, has grossly erred in making adhoc disallowances by applying mechanically rate of 15% of the Commission. During the year assessee has debited commission and brokerage paid amounting to Rs. 12,14,03,645/- in its P & L Account. The assessee company has providing herewith complete copy of ledgers account along with TDS certificates, as perceived from the document submitted herewith all expenditure are made for the business purpose of the assessee and no disallowances should be made in this regard. We have provided complete details however for Rs. 28,10,000/-no document found.
Kindly please delete the addition made by the learned Assessing Officer, that is purely applying mechanically rate, which is unsustainable on the grounds of appeal.
In the A.O. remand report has ignored and omitted the TDS Certificates. Just by giving reason that the assessee has not submitted the TDS payment challans which will prove that TDS has been deposited in respect of commission expense. Our contention is that TDS certificates duly been downloaded from NSDL sites."
4.4.2. In the assessment order, the AO has observed as follows:
"The assessee company is engaged in the business of real estate. Return declaring income of Rs. 12,50,20,046/- and deemed total income under section 115JB of Rs. 10,36,41,013/- (under mat) was e-filed by the assessee company on 31.03.2015. As is evident from above, there was compliance to any of the notices issued to the assessee. Books of accounts were produced and place on record the same have been examined and considered for disallowing u/s. 144. The following additions are made to the total income as returned in the absence of any supporting evidence produced by the assessee:
1. During the year the assessee has debited commission and brokerage paid amounting to Rs. 12,14,03,645/- in its P & L account. The assessee did not provide lager account of commission paid and also not provided any bill/voucher in supports of its claim and therefore 15% of Rs. 12,14,03,645/- which comes to Rs. 1,82,10,547/- is hereby disallowed."
4.4.3.1. The submissions filed by the appellant, case laws cited and the assessment order have been considered. The facts of the case are that during the year, the Appellant Company has debited commission and brokerage paid amounting to Rs. 12,14,03,645/- in its P & L Account. The AO has made adhoc disallowances by applying rate of 15% of the Commission paid of Rs. 12,14,03,645/- i.e. Rs.
11ITA No.- 3613/Del/2018 Lord Krishna Realinfra Pvt. Ltd.
1,82,10,547/-. The appellant company has stated that it has filed the complete copies of ledger accounts along with TDS certificates during appellate proceedings and before the AO during the Remand Report. The appellant has submitted that all the expenditure are made for the business purpose of the appellant company and no disallowances should be made in this regard.
4.4.3.2. A perusal of the details filed reveals that the Company has furnished details with regard to Rs, 11,85,93,645/-. However, the Appellant has stated that for Rs. 28,10,000/-, no documents can be filed as the same relate to very small brokerages paid to various parties. A perusal of the Remand Report filed by the AO reveals that the AO has ignored and omitted the TDS Certificates by stating that the Appellant has not submitted the TDS payment challans which will prove that the TDS has been deposited in respect of the commission expense. The Appellant has argued that the TDS certificates have been downloaded from NSDL sites. In view of the above discussion and the details filed by the appellant, the addition with regard to Rs, 11,85,93,645/- is deleted. However, the Appellant has stated that for Rs. 28,10,000/- no documents can be filed and therefore, the addition of Rs. 28,10,000/- are upheld. The percentage method of making ad hoc disallowance by the AO, is held to be routine and without any basis. The addition on this ground is restricted to Rs. 28,10,000/- Appeal on this ground is partly allowed."
7.5 The ld. Sr. DR supported the order of the AO and grounds of appeal filed by the Revenue.
7.6 We have heard both the parties and perused the material available on record. In this case, the AO had made an ad hoc disallowance of Rs. 1,82,10,547 being 15% of commission of Rs. 12,14,03,645/-. The Ld. CIT(A) noted that the assessee had filed details with regard to Rs. 11,85,93,645/- and considered it allowable and held that the balance amount of Rs. 28,10,000/- was not allowable since, no details were furnished by the assessee. Thus, out of the total disallowance of Rs. 1,87,10,547/- disallowed by the AO a sum of Rs.
1,54,00,547/- was deleted, while the balance amount of Rs. 28,10,000/- was 12 ITA No.- 3613/Del/2018 Lord Krishna Realinfra Pvt. Ltd.
confirmed. Thus, it is seen that the Ld. CIT(A) has allowed relief to the assessee after making factual verification of the details filed before her. No contrary facts have been brought on record by the Revenue to controvert the above findings of the Ld. CIT(A). Hence, the order of the Ld. CIT(A) is upheld, hence the ground is dismissed.
8. In respect of addition of Rs. 7,72,29,746/-, contested by the Revenue in ground no. 3 of the appeal, which is reproduced as under:
"3. The Ld. CIT(A) erred in restricting the addition to Rs. 6,64,597/- made by AO as against of Rs. 7,72,29,746/- being difference of income as per 26AS and in not appreciating the facts raised by the AO in the remand report regarding anomalies of TDS return and debit note, as mentioned by AO in his remand report.
8.1 The AO made the disallowance as under:
"3. Further as per 26AS of the assessee the total income for A.Y. 2012-13 is Rs. 42,83,56,417/-, whereas the assessee company has credited total revenue income amounting to Rs. 35,11,26,671/- in its Profit and loss account and therefore under stated income by Rs. 7,72,29,746/- which is hereby added to income of the assessee company."
8.2 The AO submitted his remand report as under:
" Further as per 26AS of the assessee the total income for A.Y. 2012-13 is Rs. 42,83,56,417/-, whereas the assessee company has credited total revenue income amounting to Rs. 35,11,26,671/- in its Profit and loss account and therefore under stated income by Rs. 7,72,29,746/- which is hereby added to income of the assessee company.
3) Debit Note- In respect of the debit notes furnished by the assessee, it is seen that in respect of the debit note issued by M/s. Jaiprakash Associates Limited, the debit note is relating to the interest and administration charges whereas the amount credited by M/s. Jaiprakash Associates Ltd., as reflected in Form 26AS, is relating to commission paid under section 194H. The nature of two transaction being different, it is not clear 13 ITA No.- 3613/Del/2018 Lord Krishna Realinfra Pvt. Ltd.
whether the assessee has simultaneously made some other expenditure entry in relation to the same debit note.
8.3 The assessee submitted its rejoinder to the Remand Report as under:
4. Additional Evidences in respect of Grounds of Appeal-4: In the A.O. Remand report Ld. A.O. has not discussed for the matter for considering Income from form 26AS. Merely in point no. 2 Ld. A.O. just given assessee has only filed a one page document which in no way proves that return of the deductor has been revised..
Further In A.O. Remand report point no. 3 debit note of Jaiprakash Associates limited not accepted just by saying that not clear whether the assessee has simultaneously made some other expenditure entry in relation to the same debit note. Our view, how it is possible as the assessee has shown commission income as per form 26AS refer income reconciliation again produced the same Annexure-
2But we have duly been submitted Income Reconciliation with form 26AS statement. In fact the difference of Rs. 7,72,29,746/- is by reason of :-
1. Service 4,35,34,442/- As this portion pertain tax to service tax payable portion by the assessee company. Should not be considered as income because deductor has deducted TDS on gross part inclusive of Service tax as charged by the assessee.
2. Supertech 1,93,61,875 Supertech wrongly limited filled its TDS return, wrong figure of shown in the form 26AS of the assessee, which cannot be said as income of the assessee. Now pls refer attached form 26AS it shows reversal. Annexure-3 14 ITA No.- 3613/Del/2018 Lord Krishna Realinfra Pvt. Ltd.
3. Debit Note 1,05,11,752/- From time to time discount of brokerage need to offer, based upon debit note raised by the customers
4. IREO Pvt. 664,597/- IREO wrongly filled Limited TDS return
5. M3M 31,57,080/- M3M as customer wrongly filled TDS return Total 7,72,29,746/-
Departmental view related to mismatch of 26AS income:-Instruction No. 10/2017 w.e.f. 01.04.2017 section 143(1)(a)(vi) of the Act are invoked only in appropriate cases, while processing the return of income, prescribes that the total income or loss shall be computed after making adjustment for addition of income appearing in Form 26AS or Form 16A or Form 16 (the three Forms) which has not been included in computing the total income in the return.
2. In this regard, while processing income-tax returns filed in Forms ITR-2, 3, 4, 5 & 6, doubts have arisen regarding the nature, extent and scope of comparison of information as contained in the return of income with the three Forms which might lead to issuance of Intimation proposing adjustments in the returned income. It has also come to notice that some of the information so available in the ITRs is incomparable with information contained in the three Forms. In this backdrop, it has become imperative to lay down suitable guidelines for CPC/AOs so that provisions of section 143(1)(a)(vi) of the Act are invoked only in appropriate cases.
Thus the Income Tax department will not issue the income tax notices in such cases l.e. mismatch of income mentioned in ITR and as per Forms 16, Form 16A and Form 26AS.
➤ Further as decided case law for mismatch of Income as per 26AS form:-
1. The above case law relied upon by Ld. A.R. squarely covers the facts and circumstances of the case, therefore, following the Hon'ble Gujarat High Court {CIT Vs President Industries 250 ITR 654.) we hold that entire turnover cannot be added to the income of assessee and profits embedded in the turnover can only be taxed. The assessee did not produce vouchers / bills to support the increase in expenditure in his revised P & L account. Therefore, instead of 8% of turnover to be included as profits on undisclosed turnover, we hold that an amount equivalent to 12% of turnover be included in the income of assessee. In view of the above, the A.O. is directed to delete the addition on account of unrecorded turnover..15
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Income Tax Appellate Tribunal Delhi, Kayyum Ahamed, Meerut vs Assessee on 22 May, 2015- Annexure-4 2. Delhi High Court in Court On its Own Motion v. UOI and Ors-2013-TIOL- 207-HC-DEL-IT in its judgement dated 14.03.2013 Apex Court in the above referred case, started with these words, Whether computerisation and Central Processing of Income Tax Returns is a boon or bane is rather simple to answer, as benefits of computerisation easily outweigh and outscore any argument to the contrary. Computerization does away with human or manual element and the frailties attached and ensures transparency besides being quick and fool proof. Alas, it is a human element and frailties which have resulted in the present Public Interest Litigation. Thank God if your FORM 26AS is correct!
3. Revenue cannot shift the burden to the assessee on the ground mismatch of Income from form 26AS treated as income by ignoring the facts of audited balance sheet of the company and non-receipt of amount.
The learned members of the ITAT opined that even though the burden of proof is initially on the shoulder of the assessee, the AO is also equally responsible to find out whether the credit entry found on 01.07.2010 is genuine or not. The AO cannot take advantage of the Ignorance or handicap of the assessee and say that there was undisclosed receipt by the assessee. When the assessee claims that the entry as on 01.07.2010 is a wrong entry, the AO in all fairness has to examine the same and find out whether there was genuine entry or not. The AO was conferred the power of civil court to examine and find out the real nature of transaction. If the AO could not exercise the power conferred on him, It Is not known how the individual citizen of this country will be able to find out the genuineness of the transaction. Therefore, in order to meet the ends of justice. ITA No.121/Mds/2016 P.K. Rajasekar Vs. I.T.O. Chennai ITAT.
4. Ι.Τ.Α. No. 4157/Del/2011, ITO Vs. Sh. Pankaj Vij, Rohtak.. As pointed by the AR, mismatch with the figures in Form 26AS of ITD database itself can not be a ground to hold that there is understatement of receipts. It is trite in law that correct income has to be taxed in correct hands and in the correct year.
5. It is a well settled proposition that the income can be assessed in the hands of right person only. In the case of ITO vs. Ch. Atchaiah (1966) 218 ITR 239 (SC), the Hon'ble Supreme Court held that the AO can and he must, tax the right person and the right person alone. The 'right person' is meant to be the person who is liable to be taxed, according to law, with respect to a particular income. Accordingly we pray for relief now as since these differences in reconciliation is very much explainable. Merely based upon reporting in the form 26AS the addition to income cannot made. This addition for Rs. 7,72,29,746/- has made without any substantive evidence. Also learned Assessing Officer for non-explained the fact upon the case and without calling reconciliation of income and recording sufficient evidence on record, hence addition made by Assessing Officer, we pray before your goodself for deletion."
16ITA No.- 3613/Del/2018 Lord Krishna Realinfra Pvt. Ltd.
8.4 The ld. CIT(A) deleted the said addition and the relevant extract of the ld.
CIT(A) is reproduced as under:
"4.6. Ground no 4: That the learned Assistant Commissioner of Income Tax has erred both in law and facts treating total revenue of Rs. 42,83,56,417/- in spite of correct revenue of Rs. 35,11,26,671/- and therefore mere fact non-3 reconciled revenue with form 26AS could not be a ground to bring income chargeable to tax under the Act. 4.6.1. The AR has submitted that:
"That the learned Assessing officer has erred both in law and facts treating total revenue of Rs. 42,83,56,417/- in spite of correct revenue of Rs. 35,11,26,671/- and therefore mere fact non-reconciled revenue with form 26AS could not be around to bring income chargeable to tax under the Act.
As per form 26AS (At that time) gross amount on which TDS deducted by Real Estate companies (customer) on their Brokerage expense. Gross amount show is Rs. 42,83,56,417/-Whereas the assessee company has credited total revenue income amounting to Rs. 35,11,26,671/- in its Profit and Loss account.
The learned assessing officer has made addition of Rs. 7,72,29,746/-(difference of income as per form 26AS), which is totally unjustified based upon fact and law.
In this regard the assessee hereby submitting a copy of Income reconciliation with Form 26AS along with debits notes and invoices.
Brief summary of differences are:-17
ITA No.- 3613/Del/2018 Lord Krishna Realinfra Pvt. Ltd.
Accordingly, we pray for relief now as since these differences in reconciliation is very much explainable. Merely based upon reporting in the form 26AS the addition to income cannot made. This addition for Rs. 7,72,29,746/- has made without any substantive evidence except Rs. 664597/- addition upheld. Also learned Assessing Officer for non-explained the fact upon the case and without calling reconciliation of Income and recording sufficient evidence on record, hence addition made by Assessing Officer, we pray before your goodself for deletion.
Supporting details provided on the records."
4.6.2. In the assessment order, the AO has observed as follows:
3. Further as per 26AS of the assessee the total income for AY 2012-13 is Rs.
42,83,56,417/- whereas the assessee company has credited total revenue income amounting to Rs. 35,11,26,671/- in its profit and loss account and therefore under 18 ITA No.- 3613/Del/2018 Lord Krishna Realinfra Pvt. Ltd.
stated Income by Rs. 7,72,29,746/- which is hereby added to income of the assessee company.
This order is passed keeping in view the past records of the assessee and the profit shown by the assessee during the year."
4.6.3.1. The AO has treated the total revenue at Rs. 42,83,56,417/- instead of the revenue of Rs. 35,11,26,671/- as filed by the Appellant. The AO observed that the Appellant failed to reconcile the revenue with form 26AS and therefore, the AO increased the income chargeable to tax under the Act. As per form 26AS (at the time of assessment proceedings) gross amount on which TDS deducted by Real Estate companies (customer) on the Brokerage expense of the Appellant was Rs. 42,83,56,417/-. Whereas the appellant company has credited total revenue income amounting to Rs. 35,11,26,671/- in its Profit and Loss account. The AO has made addition of Rs. 7,72,29,746/- (difference of Income as per form 26AS).
4.6.3.2. In this regard, during Appellate proceedings, the Appellant Company submitted a copy of Income reconciliation with Form 26AS along with debits notes and invoices. As per the remand report of the AO dated 08.01.2018, the appellant has submitted basis of difference of Rs. 7,72,29,746/- in form 26AS and the Income disclosed in profit and loss a/c. The appellant has contended that as the company has maintained regular books of accounts and is audited u/s. 44AB, all the income is credited in P & L a/c may duly be accepted and has submitted that it is totally unjustified to consider income as referred in form 26AS.
4.6.3.3. The appellant has submitted the basis of difference of Rs. 7,72,29,746/- in form 26AS and the income disclosed in profit and loss a/c. The same is reproduced below:
(1)Service Tax portion (Rs. 4,35,34,442/-):-As this portion pertains to service tax payable by the appellant company, it should not be considered as income because the Deductor has deducted TDS on the gross part inclusive of Servicetax as charged by the appellant. As this portion pertain to service tax payable by the appellant company.
Payable (Credit) portion of Service tax cannot be treated as Income. As the company is a broker of various real estate company, the Real Estate companies used to deduct TDS, but showed gross amount (Inclusive of service tax) in the TDS return. Accordingly, net portion of Service tax portion has wrongly been included in form 26AS, that cannot be assumed as Income.
To substantiate service tax, the Appellant Company has also produced coples of invoices, e.g. a Invoice no. on page 2; BOP Pvt. Ltd. during appellate proceedings, which are kept on record.
Commission Income is Rs. 346110/-
On which service tax charged is Rs. 42779/-
19ITA No.- 3613/Del/2018 Lord Krishna Realinfra Pvt. Ltd.
Total is Rs. 388,889/-
Accounting entry passed as:
BOP Pvt Ltd. Debit by Rs. 3,88,889/-
To Commission Income Rs. 3,46,110/-
To Service Tax Payable Rs. 42,779/-
As form 26AS reflect 3,88,889/- whereas commission Income is merely Rs. 3,46,110/- . The Appellant has stated that the A.O. has made addition of 42,779/- which represents service tax payable.
(2) Supertech Limited (Rs. 1,93,61,875):- Supertech wrongly filled its TDS return, wrong figure of shown in the form 26AS of the appellant, which cannot be said as Income of the appellant. The Appellant has furnished form 26AS, which shows reversal. [Annexure-3 to the submissions filed has been kept on record). Supertech is a customer to the appellant company, from whom brokerage income used to received.
Supertech wrongly filled Its TDS return, wrong figure of shown in the form 26AS of the appellant, which cannot be said as Income of the appellant but subsequently, Supertech has revised the TDS return, now this reversal shown in form 26AS.
(3) Debit Note (Rs. 1,05,11,752) From time to time discount of brokerage need to offer, based upon debit note raised by the customers. From time to time discount of brokerage need to offer, based upon debit note raised by the customers. Copies of the debit notes have been filed and are kept on record. By reason of Issuing debit note but not rectifying in the TDS return, form 26AS of the appellant is not showing correct picture of the income. Therefore, the Appellant has claimed that it cannot be made as a basis for addition.
(4) IREO Private Limited (Rs. 664,597) IREO wrongly filled TDS return. This portion is not found account for in the books of account and Appellant has agreed that there is a difference on this issue.
(5) M3M (Rs. 31,57,080) M3M a customer wrongly filled TDS return.M3M wrongly filled TDS return, wrong figure (difference) of shown in the form 26AS of the appellant, which cannot be termed as income. As this portion pertains to service tax.
Further, the appellant Company has relied upon the following case laws:
(1) Hon'ble Gujarat High Court (CIT Vs President Industries 250 ITR 654.} ( ii) Income Tax Appellate Tribunal - Delhi, Kayyum Ahamed, Meerut vs Assessee on 22 May, 2015, ITA No. 2410/Del/2013 20 ITA No.- 3613/Del/2018 Lord Krishna Realinfra Pvt. Ltd.
(iii) Delhi High Court in Court On its Own Motion v. UOI and Ors - 2013-TIOL- 207-
HC-DEL-IT dated 14.03.2013M/s. Lord Krishna Realinfra Pvt. Ltd.
Appeal No. 56/2017-18
(iv) ITA No.121/Mds/2016 P.K. Rajasekar Vs. I.T.O. Chennai ITAT.
(v) Ι.Τ.Α. No. 4157/Del/2011, ITO Vs. Sh. Pankaj Vij, Rohtak.
(vi) ITO vs. Ch. Atchaiah (1966) 218 ITR 239 (SC).
4.6.3.4. The Appellant Company has submitted as these differences have been reconciled and have been explained, merely based upon reporting in the form 26AS, the addition to income cannot be made. This addition for Rs. 7,72,29,746/- has been made without any substantive evidence except for Rs. 6,64,597/-, which has been admitted by the Appellant to be unsubstantiated. The submissions filed by the Appellant Company have been perused. In view of the fact that the differences have been explained, the addition is restricted to Rs. 6,64,597/-. This ground of appeal is partly allowed."
(emphasis supplied by us) 8.5 The ld. Sr. DR supported the order of the AO and grounds of appeal filed by the Revenue.
8.6 We have heard both the parties and perused the material available on record. In this case, the Ld. CIT(A) allowed relief of Rs. 7,65,65,149/- while confirming an amount of Rs. 6,64,597/-. The Ld. CIT(A) has allowed relief to the assessee after making factual verification of the details filed before her. No contrary facts could be brought on record by the Revenue to controvert the findings of the Ld. CIT(A). Hence, the order of the Ld. CIT(A) is upheld, hence the ground is dismissed.
21ITA No.- 3613/Del/2018 Lord Krishna Realinfra Pvt. Ltd.
9. In the result, appeal of the Revenue is dismissed.
Order pronounced in the open court on 18th May, 2026 Sd/- Sd/-
[CHALLA NAGENDRA PRASAD] [BRAJESH KUMAR SINGH]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated 18.05.2026.
Pooja.
Copy forwarded to:
1. Assessee
2. Respondent
3. CIT
4. CIT(A)
5. DR
Asst. Registrar,
ITAT, New Delhi,
22