ITO Vs SR Peddi Estates India Pvt. Ltd. (ITAT Hyderabad)
Assessee, engaged in leasing out modified commercial premises to IT companies, failed to file its return of income for A.Y. 2015-16. Based on TDS information, the AO reopened the case u/s 147 & issued notice u/s 148.
In the reassessment, AO found bank credits aggregating ₹5.40 crore while turnover per P&L was only ₹1.00 crore. The difference of ₹4.39 crore was treated as unexplained income, leading to an assessment at ₹4.63 crore u/s 147 r.w.s. 144B.
CIT(A), NFAC deleted the addition after detailed verification, holding that the bank credits were either loans from Director or rental advances from tenants duly evidenced by agreements & confirmations.
Revenue’s Contentions
- CIT(A) wrongly accepted additional evidences (confirmations, ledgers, lease deeds) in violation of Rule 46A.
- Claimed inconsistencies in figures of loan from Director — ₹2.62 crore as per confirmation vs. ₹2.02 crore in related-party note.
- Challenged genuineness of ₹1.73 crore rental advances, especially (i) ₹50 lakh from Clinical IT Consulting India Pvt. Ltd. without TDS, (ii) ₹35 lakh from IT India Pvt. Ltd. received before lease execution, & (iii) variation in tenant name Nexgen Technologies LLC vs. Nexgen Mindspace Solutions Pvt. Ltd.
Assessee’s Submissions
- Audited financials were already filed; non-upload of Form 3CA/3CD does not affect evidentiary value.
- The loan reconciliation explained that ₹2.62 crore was gross inflow & ₹2.02 crore was net movement after ₹59.88 lakh repayment.
- The ₹15 lakh discrepancy was reconciled — ₹10 lakh was cheque from Gyansamhita Tech Pvt. Ltd. wrongly posted in Director’s account.
- All rental advances were through banking channels; lease deeds, receipts, & bank entries matched.
- Name variation of tenant supported by certificate of name change.
- Remand report from AO was already obtained — hence Rule 46A fully complied with.
ITAT’s Findings
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