M/S. ARUN EXCELLO REALTY PVT. LTD.,CHENNAI V. DCIT, CORPORATE CIRCLE-1(1), CHENNAI

ITA 2267/CHNY/2025

AI Insights

The case involves M/s. Arun Excello Realty Private Limited, which appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, for the assessment year 2022-23. The primary issue was the addition made under section 41(1) of the Income Tax Act, 1961, concerning an outstanding balance of 31,24,803/- with M/s. SVA Architect, which the Assessing Officer included in the assessee's income. The CIT(A) upheld this addition. The Tribunal, however, found that the assessee had already written off this amount in the subsequent financial year, leading to a situation of double taxation if the CIT(A)'s order was upheld. Consequently, the Tribunal remanded the matter for re-evaluation with the new evidence provided by the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 784366 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2022-2023
• Appeal Filed On: 14-08-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R. V. AROON PRASAD
• Assessee Lawyers: SHRENIK CHORDIA
• Section: 133(6)

Judgement Text

"आयकर अपीलीय अिधकरण, ’ए’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ एवं ŵी अिमताभ शुƑा, लेखा सद˟ क े समƗ Before Shri S.S. Viswanethra Ravi, Judicial Member & Shri Amitabh Shukla, Accountant Member आयकर अपील सं./I.T.A. No.2267/Chny/2025 िनधाŊरण वषŊ/Assessment Year: 2022-23 M/s. Arun Excello Realty Private Limited, 18, Bhattad Towers West Cott Road, Royapettah, Chennai 600 014. [PAN: AAFCA8363E] Vs. The Deputy Commissioner of Income Tax, Corporate Circle 1(1), Chennai. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri Shrenik Chordia, C.A. ŮȑथŎ की ओर से/Respondent by : Shri R.V. Aroon Prasad, Addl. CIT सुनवाई की तारीख/ Date of hearing : 10.11.2025 घोषणा की तारीख /Date of Pronouncement : 12.11.2025 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order dated 29.07.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2022-23. 2. The assessee raised 4 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the addition made by the Assessing Officer under section 41(1) of the Income Tax Act, 1961 [“Act” in short]. Printed from counselvise.com I.T.A. No.2267/Chny/25 2 3. At the outset, it is noted that according to the Assessing Officer, the assessee has shown balance of ₹.31,24,803/- in respect of M/s. SVA Architect as outstanding since past few years. A show-cause note issued to the assessee proposing the addition under section 41(1) of the Act, wherein, the assessee admitted the said amount will be offered for taxation in FY 2023-24 (AY 2024-25). The Assessing Officer, not satisfied with the above explanation and supported by the reply under section 133(6) of the Act of M/s. SVA Architect, which is reproduced at page 3 of the assessment order, added the said amount to the total income of the assessee. The ld. CIT(A) confirmed the same while recording his reasons at page 17 of the impugned order. 4. Before us, the ld. AR Shri Shrenik Chordia, C.A. submits that the assessee written off the said amount in FY 2023-24 and the addition made by the Assessing Officer as confirmed by the ld. CIT(A), is not justified. He argued that if the order of the ld. CIT(A) is confirmed, the assessee would suffer double taxation of the same amount in the year under consideration as well as in FY 2023-24. He prayed to delete the addition made by the Assessing Officer. 5. The ld. DR Shri R.V. Aroon Prasad, Addl. CIT submits that the assessee has shown the said credit amount for the last several years and Printed from counselvise.com I.T.A. No.2267/Chny/25 3 when the Assessing Officer found the same, the assessee admitted that the same will be offered for taxation in the FY 2023-24, had not there been examination by the Assessing Officer, the assessee could not have admitted the same for taxation for FY 2023-24. The ld. DR further submits that the same was raised before the ld. CIT(A) and drew our attention the last para in page 17 of the impugned order. He vehemently argued that the ld. CIT(A) considered the explanation of the assessee and passed well reasoned order. He prayed to confirm the same. 6. Having heard both the parties, it is noted that all along the assessee has shown the outstanding liability against M/s. SVA Architect and there is no dispute with regard to the same as it is clear from the assessment order, which is reiterated by the ld. AR. In its explanation to the show-cause notice, the assessee explained that it will offer the same in FY 2023-24, but, however, it was not considered by the Assessing Officer and the ld. CIT(A). We find the same contention was raised by the assessee before the ld. CIT(A) and it was answered against the assessee as rightly pointed out by the ld. DR. Before us, the assessee filed ledger account copy of the assessee in the books of M/s. SVA Architect, placed at page 6 of the paper book, which clearly shows the opening balance debit of ₹.54,000/- as on 01.04.2021, which was shown credited to the Printed from counselvise.com I.T.A. No.2267/Chny/25 4 account of the assessee as on 28.02.2022. Therefore, it is clear that no outstanding is against the assessee in the books of account of M/s. SVA Architect as on 31.03.2023. Further, the Profit & Loss account of the assessee as on 31.03.2024 is at page 9 of the paper book, which clearly shows total income at ₹.43,21,000/- including other income. Schedule 20 is at page 18 of the paper book, which contains break-up of other income, wherein, it clearly shows writing off of ₹.44 lakhs as on 31.03.2024. Further, it is noted as on 15.03.2024, the assessee written off ₹.30,70,803/-, which is taken into credit of ₹.54,000/- out of ₹.31,24,803/-. Further, sub-ledger details of total written off as on 31.03.2024 placed at page 23 & 24 of the paper book, which contains ₹.30,70,803.26 as against SVA Architect. Therefore, we find force in the arguments of the ld. AR when the said amount is recognized as income and consequently written off in the books of the assessee, the addition made in the year under consideration is not justified, which amounts to double taxation of the same amount. Thus, the addition made by the Assessing Officer and confirmed by the ld. CIT(A) is liable to be deleted. But, however, the ledger details of the assessee in the books of SVA Architect, General Ledger Sub-ledger bill details as on 15.03.2024, Profit & Loss account and relevant schedule showing break-up of other income, details of written off as on 31.03.2024, which we have discussed herein above, Printed from counselvise.com I.T.A. No.2267/Chny/25 5 were not available before the Assessing Officer and the ld. CIT(A), which is clear from the assessment order as well as the impugned order. Therefore, we deem it proper to remand the matter to the file of the Assessing Officer for fresh consideration to consider the above said details keeping in view of our observations and pass order accordingly. Thus, the ground raised by the assessee is allowed for statistical purposes. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 12th November, 2025 at Chennai. Sd/- Sd/- (AMITABH SHUKLA) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 12.11.2025 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF. Printed from counselvise.com "