SUBRAMANIAN RAMASAMY,COIMBATORE V. INCOME TAX OFFICER, NON CORP WARD 2(2), COIMBATORE

ITA 75/CHNY/2025

AI Insights

The case involves Subramanian Ramasamy, an agro-scientist providing consultancy services for pesticide research, who appealed against the order of the Commissioner of Income Tax (Appeals) which upheld the addition of Rs.34,19,695 to his income for the Assessment Year 2017-18. The addition was based on advances received from UPL Limited and Syngenta India Private Limited, which were reported in Form 26AS but not fully accounted for in the assessee's declared income. The Tribunal found that the assessee was not given a proper opportunity to explain the timing of income recognition for the advances received, particularly for the Rs.37,20,000 from UPL Limited, which was offered in the subsequent assessment year. The Tribunal also noted that the assessee was not given a chance to contest the enhancement of income by Rs.6,55,870 by the CIT(A).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714313 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANITHA
• Assessee Lawyers: DARSHAN BOTHRA; RS.
• Keywords: Set aside; Opportunity of being heard; FORM 26AS

Judgement Text

"आयकर अपीलीय अधिकरण, ‘सी’ न्यायपीठ, चेन्नई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI श्री मनु क ुमार गिरर, न्यागिक सदस्य एवं श्री एस. आर. रघुनाथा, लेखा सदस्य क े समक्ष BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI S.R.RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.:75/Chny/2025 धनिाारण वर्ा / Assessment Year: 2017-18 Subramanian Ramasamy, 405, Sathy Road, Ganapathy, Coimbatore – 641 006. vs. The Income-tax Officer, Non-Corp Ward 2(2), Coimbatore. [PAN:AOFPS-0316-E] (अपीलाथी/Appellant) (प्रत्यथी/Respondent) अपीलाथी की ओर से/Appellant by : Shri. Darshan Bothra, C.A. प्रत्यथी की ओर से/Respondent by : Ms. Anitha, Addl. JCIT. सुनवाई की तारीख/Date of Hearing : 21.07.2025 घोर्णा की तारीख/Date of Pronouncement : 05.08.2025 आदेश /O R D E R PER S. R. RAGHUNATHA, AM : The present appeal is filed by the assessee for the Assessment Year (A.Y.) 2017-18 against the order dated 18.11.2024 passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (in short ld.CIT(A)). 2. The brief facts of the case are that the assessee is an individual, agro-scientist who provides consultancy services for research of new pesticides. The companies approach the assessee in order to conduct trials with respect to new pesticides developed by them and makes payment to the assessee for conducting the said research. The said pesticides are then tested by the assessee on the lands owned by farmers for which moneys are paid to the farmers by the assessee. These moneys are paid by the assessee to the farmers for the use of their land and other agricultural activities from the seedling stage to the harvest stage using the pesticides under Printed from counselvise.com :-2-: ITA. Nos:75/Chny/2025 experimentation. The assessee filed his return of income for the A.Y. 2017-18 on 31.07.2017 admitting a total income of Rs.8,88,032/- and revised his return of income on 29.05.2018 admitting a total income of Rs.9,50,305/-. 3. In the impugned year, the assessee received advances from UPL Limited and Syngenta India Private Limited to the tune of Rs.37,20,000/- and Rs.6,50,000/- totalling to Rs.43,70,000/-. These sums were reported in Form 26AS of the assessee since tax was deducted at source on the said payments made by UPL Limited and Syngenta India Private Limited. 4. The assessee’s case was selected for scrutiny and notices were issued to the assessee to which the assessee filed response from time to time. The assessee during the course of assessment proceedings submitted his financial statements wherein the assessee had disclosed the sum received from UPL Limited to the tune of Rs.37,20,000/- as current liability since this was only an advance received by the assessee and was not utilised by the assessee in the impugned year for research purpose. The other sum of Rs.6,50,000/- received from Syngenta India Private Limited was offered as revenue from consultancy services in the impugned year in the financial statements. 5. The Assessing Officer (AO), while completing the assessment vide order passed u/s.143(3) dated 13.12.2019 added a sum of Rs.34,19,695/- (i.e.,Rs.43,70,000/- being the total of the sums received from UPL Limited and Syngenta India Private Limited minus Rs.9,50,305/- being the gross total income declared by the assessee in the return of income). 6. Aggrieved by the said addition, the assessee preferred an appeal before the learned Commissioner of Income Tax (Appeals), NFAC, Delhi (in short Ld.CIT(A)). 7. The ld.CIT(A) decided the appeal in the following manner by passing an order dated 18.11.2024: a. Upheld the addition made by the AO for the reason that the assessee had not specified the year in which the said income was offered to tax. Printed from counselvise.com :-3-: ITA. Nos:75/Chny/2025 b. Enhanced the income of the assessee by Rs.6,55,870/- 8. Aggrieved by the order of the ld.CIT(A), the assessee is in appeal before us. 9. The ld.AR for the assessee submitted that with respect to (a) above, it may be noted that the ld.CIT (A) did not raise the question of in which year the said Rs.37,20,000/- was offered to tax during the course of the first appellate proceedings and thus the assessee was not given an opportunity to respond. Consequently, the assessee was unable to explain that the sum of Rs.37,20,000/- received by the assessee from UPL Limited was offered in the subsequent year i.e., in the assessment year 2018-19. (Proof filed during the course of personal hearing before the Hon’ble Income Tax Appellate Tribunal i.e., page 4 of the computation statement of assessment year 2018-19) 10. With respect to (b) above, it may be noted that the ld.CIT(A) has taken the difference between the sums reported in Form 26AS i.e., Rs.43,20,000/- and the net consultancy income of Rs.2,94,435/- (i.e., after deduction of expenses) amounting to Rs.40,75,565/- as the addition, whereas, the AO had originally added the difference of the sums reported in Form 26AS i.e., Rs.43,20,000/- and the gross total income of Rs.9,50,305/- amounting to Rs.34,19,695/- as the total income of the assessee. Hence, a sum of Rs.6,55,870/- being the difference between Rs.40,75,565/- (difference as computed by the ld.CIT(A)) and Rs.34,19,695/- (difference as computed by the AO) was enhanced as income by the ld.CIT(A). It may be noted that the assessee was not provided an opportunity of being heard to rebut this enhancement of income. 11. In this connection, the ld.AR submitted that neither the ld.CIT(A) nor the AO provided an opportunity to the assessee to explain that the sums received from UPL Limited were actually offered to tax in the subsequent year i.e., in the assessment year 2018-19. 12. Further, the ld.AR submitted that the assessee has offered the sum of Rs.37,20,000/- in the revenue account described as “on account of UPL – received Printed from counselvise.com :-4-: ITA. Nos:75/Chny/2025 and declared a net loss of Rs.9,000/- with respect to this transaction after reducing the expenses incurred for the research of pesticides in the computation of income for the assessment year 2018-19. The same can be seen at page 4 of the computation statement pertaining to assessment year 2018-19 submitted. 13. In light of the above, the ld.AR submitted that no addition is warranted in the facts and circumstances of the case since the assessee has already offered the sums received from UPL Limited in the subsequent year. Alternatively, the ld.AR prayed that since neither the ld.CIT (A) nor the AO gave an opportunity to the assessee to explain that the sums received from UPL Limited of Rs.37,20,000/- were offered in the subsequent year i.e., in the assessment year 2018-19, the said issue may be set aside to the file of the AO for the limited purpose of verifying the assessee’s claim. 14. Per contra the ld.DR supported the order of the ld.CIT(A) and prayed for dismissing the appeal of the assessee. 15. We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the AO has passed an order by considering the information as per the 26AS has added the entire amount of gross receipts (Rs.43,70,000/-) as income of the assessee by reducing the net income declared by the assessee in his return of income. On appeal filed by the assessee the same has been confirmed by the ld.CIT(A) by enhancing the addition by Rs.6,55,870/- being the difference between Rs.40,75,565/- (difference as computed by the ld.CIT(A)) and Rs.34,19,695/- added by AO without providing an opportunity to the assessee. 16. In view of the above and to meet the ends of justice we set aside the order of ld.CIT(A) and remit the matter back to the file of Assessing Officer and direct the AO to decide the issue of additions made by considering the return of income filed by the assessee and the corresponding income declared in respect of the impugned assessment year in the subsequent years and pass the order in accordance to law, after providing reasonable opportunity to the assessee. Needless to say, the assessee to be diligent and file written submissions and relevant documents if advised so. Printed from counselvise.com :-5-: ITA. Nos:75/Chny/2025 17. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 05th August, 2025 at Chennai. Sd/- Sd/- (मनु क ुमार गिरर) (MANU KUMAR GIRI) न्यागिक सदस्य/Judicial Member (एस. आर. रघुनाथा) (S. R. RAGHUNATHA) लेखासदस्य/Accountant Member चेन्नई/Chennai, धदनांक/Dated, the 05th August, 2025 jk आदेश की प्रधतधलधप अग्रेधर्त/Copy to: 1. अपीलाथी/Appellant 2. प्रत्यथी/Respondent 3.आयकर आयुक्त/CIT– Chennai/Coimbatore/Madurai/Salem 4. धवभागीय प्रधतधनधि/DR 5. गार्ा फाईल/GF Printed from counselvise.com "