LINGA NAVEENKUMAR,HYDERABAD V. ITO., WARD-4(1), HYDERABAD

ITA 551/HYD/2025

AI Insights

This case involves an appeal by Shri Linga Naveenkumar against the order of the CIT (A)-NFAC Delhi for the Assessment Year 2017-18. The primary issues in the appeal were the disallowance of development charges and construction costs, the computation of capital gains, and the treatment of salary and commission incomes. The Tribunal found discrepancies in the CIT (A)'s acceptance of the Assessing Officer's remand report and the additional evidence provided by the assessee. The Tribunal's decision emphasized the need for a thorough examination of the additional evidence regarding construction costs and the proper crediting of taxes on declared incomes.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 773472 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Assessment Year: 2017-2018
• Appeal Filed On: 28-03-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K PRABHABATI
• Keywords: Set aside; Additional evidence; Corroborative evidences; Salary income; Capital Gains
• Section: 148; 144; 139

Judgement Text

" ITA No 551 of 2025 Linga Naveenkumar Page 1 of 10 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ DB-A ‘ Bench, Hyderabad Before Shri Vijay Pal Rao, Vice-President A N D Shri Manjunatha, G. Accountant Member आ.अपी.सं /ITA No.551/Hyd/2025 (िनधाŊरण वषŊ/Assessment Year: 2017-18) Shri Linga Naveenkumar Hyderabad PAN:AAFPN0021P Vs. Income Tax Officer Ward 4(1) Hyderabad (Appellant) (Respondent) िनधाŊįरती Ȫारा/Assessee by: Advocate K Prabhabati राज̾ व Ȫारा/Revenue by:: Shri TV Vamshidhar, Sr.AR सुनवाई की तारीख/Date of hearing: 24/09/2025 घोषणा की तारीख/Pronouncement: 26/09/2025 आदेश/ORDER Per Vijay Pal Rao, Vice President This appeal by the assessee is directed against the order dated 17/01/2025 of the learned CIT (A)-NFAC Delhi, for the A.Y.2017-18. 2. The assessee has raised the following grounds of appeal: “1. On the facts and in the circumstances of the case, the order passed by the learned Commissioner (Appeals)/NFAC is erroneous and unsustainable on facts and in law. Printed from counselvise.com ITA No 551 of 2025 Linga Naveenkumar Page 2 of 10 2. The learned CIT (A) erred in disallowing the development charges and other construction costs of Rs. 25,83,000/- without any cogent reason when the same has been verified by the Assessing Officer and found to be in order in the remand report. The learned CIT (A) erred in computing the capital gains at Rs.37,50,000/- i.e., the sale value of the property as against the long term capital loss of Rs. 5,37,729/- claimed by the Appellant without cogent reasons as to why he is not accepting the favourable report of the Assessing Officer. 3. The learned CIT (A) erred in dismissing the ground with respect to salary income of Rs.74,78,627/- without appreciating the fact that the Appellant has already offered the same to tax in the return of income filed in response to the notice issued u/s. 148 of the Income Tax Act, 1961. The learned CIT(A) failed to appreciate that dismissing the ground would result in taxing the salary twice. 4. The learned CIT(A) erred in dismissing the ground with respect to commission income of Rs. 3,26,610/- without appreciating the fact that the same was already offered as income under the head ‘income from other sources’ by the Appellant in the return filed in response to notice under section 148 of the Act. The Ld. CIT(A) ought to have appreciated that dismissing the ground would result in taxing the commission income twice. 5. The learned CIT(A) erred in taking a contrary view from that of the Assessing Officer in the remand report without cogent and compelling reasons. 6. For these and other grounds that may be urged, it is prayed that the appeal may be allowed.” 3. Ground Nos. 1 & 2 are regarding the disallowance made by the Assessing Officer on account of development charges and construction cost while computing the Long Term Capital Gains/loss arising from the sale of the property. The learned Counsel for the assessee has submitted that the Assessing Officer has made the addition of the entire sale consideration of the immovable property sold by the assessee without allowing the cost of development and construction. She has pointed out that before Printed from counselvise.com ITA No 551 of 2025 Linga Naveenkumar Page 3 of 10 the learned CIT (A), the assessee filed the relevant record in the shape of the development agreement with the builder as well as the construction agreement under which the assessee had paid the cost of development and construction of the house. The learned CIT (A) called for a remand report from the Assessing Officer and the Assessing Officer has accepted the documents filed by the assessee in his remand report. However, the learned CIT (A) has confirmed the addition on account of construction cost ignoring the remand report of the Assessing Officer. She has referred to the petition filed under Rule 29 of the ITAT Rules, 1963 for admission of the additional evidence and submitted that the learned CIT (A) has confirmed the disallowance made by the Assessing Officer on the ground that the assessee has not produced the completion certificate and other documentary evidence for purchase of the material used in construction of the house. The learned Counsel for the assessee has submitted that the assessee has now produced the completion certificate in the shape of additional evidence along with the receipts, loan statement, and receipt issued by the builder against the construction cost and development charges. Thus, the learned Counsel for the assessee has submitted that the additional evidence filed by the assessee may be admitted for deciding this issue on merit. She has referred to the order of the learned CIT (A) and submitted that despite the Assessing Officer has accepted the claim of the assessee in the remand report, the learned CIT (A) has confirmed the addition made by the Assessing Officer in the re-assessment proceedings. Thus, the learned Counsel for the assessee has submitted that in view of the remand report as well Printed from counselvise.com ITA No 551 of 2025 Linga Naveenkumar Page 4 of 10 as the additional evidence filed by the assessee, the addition sustained by the learned CIT (A) be deleted. 4. On the other hand, the learned DR has submitted that the assessee has filed only an agreement for construction of the house without any supporting evidence to show that the construction was completed and incurrence of the development charges and other construction cost as claimed by the assessee. The assessee has also not corroborated the claim by filing the documentary evidence such as vouchers for payment, purchase of material etc. He has relied upon the orders of the authorities below. The learned DR has pointed out that the assessee did not file any return of income u/s 139 as well as in response to the notice issued u/s 148 of the I.T. Act. Therefore, nothing was filed before the Assessing Officer in support of these claims. The return was filed only at the fag end of the limitation for passing the assessment order. 5. We have considered the rival contentions as well as the relevant material available on record. Undisputedly, the assessee has not filed any return of income u/s 139 of the Act. On the basis of the information that the assessee has entered into significant financial transaction to the tune of Rs.1,36,68,715/- during the year under consideration, a notice u/s 148 of the Act was issued on 29/03/2021. In response to the said notice, the assessee did not file any return of income and consequently, the Assessing Officer proceeded to frame the assessment on best judgment basis. The Assessing Officer has assessed the total Printed from counselvise.com ITA No 551 of 2025 Linga Naveenkumar Page 5 of 10 income of the assessee at Rs.1,36,58,715/-comprising of an addition made on account of purchase of Motor Vehicle of Rs.21,13,478/-, sale of immovable property of Rs.37,50,000/-, salary received of Rs.74,78,627/- and commission/brokerage income of Rs.3,26,610/-. The assessee challenged the assessment order before the learned CIT (A) and also produced the evidences to show that the assessee was having sufficient funds for purchase of Motor Vehicle and also incurred expenditure in respect of purchase of property, development of the same and construction of the said property vide 3 separate documents being sale deed, development agreement as well as construction agreement. The learned CIT (A) forwarded the evidence filed by the assessee to the Assessing Officer for submission of remand report. The Assessing Officer has filed the remand report which is reproduced by the learned CIT (A) in para 4.3 of the impugned order as under: Printed from counselvise.com ITA No 551 of 2025 Linga Naveenkumar Page 6 of 10 ” 6. As regard the purchase of Motor Vehicle, the learned CIT (A) has already deleted the said addition made by the Assessing Officer. The addition made by the Assessing Officer on account of sale of immovable property, the learned CIT (A) has Printed from counselvise.com ITA No 551 of 2025 Linga Naveenkumar Page 7 of 10 confirmed the addition to the tune of Rs.25,83,000/- out of the total addition of Rs.37,50,000/- in para 4.5 as under: 7. Thus, the learned CIT (A) has pointed out that the assessee has not filed any corroborative evidence such as completion certificate, voucher of payment for purchase of material and details of the persons. At the same time, the Assessing Officer in his remand report has stated that the copies of the documents furnished has been verified with reference to the computation of capital gain/loss and found to be in order. Ignoring this report of the Assessing Officer who has verified the documents, the learned CIT (A) has confirmed the addition in the absence of corroborative evidence such as completion certificate, Printed from counselvise.com ITA No 551 of 2025 Linga Naveenkumar Page 8 of 10 vouchers of the payments, etc., Now the assessee has filed the additional evidence in the shape of completion certificate, receipt of the builder and loan certificate. Accordingly, in the facts and circumstances of the case, we set aside this issue to the record of the Assessing Officer to verify and examine the additional evidences filed by the assessee and then allow the claim of the assessee, if the documents filed by the assessee are found to be in order. 8. Ground No.3 is regarding the addition made by the Assessing Officer on account of salary income of Rs.74,78,627/-. The learned Counsel for the assessee has submitted that in the remand report, the Assessing Officer has accepted the fact that the assessee has declared the net salary income of Rs.69,27,305/- in the return of income. However, the learned CIT (A) has confirmed the addition made by the Assessing Officer without allowing the deduction u/s 10 as well as on account of professional tax. 9. On the other hand, the learned DR has submitted that though the assessee has declared the salary income in the return of income, however, the Assessing Officer has not made any addition to the returned income of the assessee but the total income of the assessee is assessed by considering the salary income as well as other income of the assessee. Therefore, there is no question of double taxation of the same income. Printed from counselvise.com ITA No 551 of 2025 Linga Naveenkumar Page 9 of 10 10. We have considered the rival submission as well as relevant material on record. As it is evident from the remand report of the Assessing Officer that the Assessing Officer has verified the return of income filed by the assessee and also found that the net salary income taxable at Rs.69,27,305/- was declared in the return of income. Therefore, the deduction of Rs.5,48,922/- u/s 10 of the Act as well as on account of professional tax of Rs.2400/-allowable under the provisions of the Act cannot be denied to the assessee. Since the assessee has already declared the salary income in the return of income, therefore, the addition is restricted only to the net salary income of Rs.69,27,305/- and the Assessing Officer is directed to allow the credit of the tax paid by the assessee on self-assessment/returned income. 11. Ground No.4 is regarding the addition made on account of commission income. 12. We have heard the learned AR and the learned DR and considered the relevant material available on record,. In the remand report, the Assessing Officer has stated that the assessee received commission income from M/s. Lanco Hills Technology Ltd and the same was declared in the return of income under the head “income from other sources”. The said income of Rs.3,26,610/- was also assessed by the Assessing Officer while framing the assessment u/s 144 of the Act, therefore, there is no difference in the income declared by the assessee in the return of income and assessed by the Assessing Officer while framing the assessment. The only grievance which may be raised by the Printed from counselvise.com ITA No 551 of 2025 Linga Naveenkumar Page 10 of 10 assessee is regarding the credit of tax paid by the assessee on such income declared in the returned income. Accordingly, the Assessing Officer is directed to grant the credit of tax paid by the assessee on the commission income as declared in the return of income. 13. In the result, appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the Open Court on 26th September, 2025. Sd/- Sd/- (MANJUNATHA, G.) ACCOUNTANT MEMBER (VIJAY PAL RAO) VICE-PRESIDENT Hyderabad, dated 26th September, 2025 Vinodan/sps Copy to: S.No Addresses 1 Shri Linga Naveenkumar, House No.21, Laxmi Vihar Phase-2 Nalgandla, Telangana 500019 2 Income Tax Officer Ward 4(1) Hyderabad 3 Pr. CIT - Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order Printed from counselvise.com "