Case Law Details
Kempaiah Kemparaju Vs DCIT (ITAT Bangalore)
In a significant ruling, the Bangalore ITAT held that best judgment assessment u/s 144 cannot be based on mere suspicion, arbitrary assumptions or “wild guesswork.” The Tribunal reduced the AO’s estimated profit rate from 15% to 7% in the case of a civil contractor whose receipts were entirely from Government/PWD contracts through banking channels with TDS deductions.
The assessee had not filed returns for AYs 2013-14 and 2017-18 despite contract receipts exceeding ₹17 crore. The AO completed reassessment ex parte u/s 147 r.w.s. 144 and estimated profit at 15% of gross receipts, primarily because books of account and supporting records were not produced.
Before the Tribunal, the assessee explained that he had actually declared net profit of around 6.06% after depreciation and that the effective cash profit margin exceeded 10%-12%. The ITAT observed that the AO had completely misunderstood the assessee’s submissions and mechanically applied a 15% rate without any supporting material or industry basis.
Relying on the Supreme Court ruling in Brij Bhushan Lal Parduman Kumar v. CIT and Karnataka High Court decisions including Jayanthilal R. Tunk and Sri Shankar Khandasari Sugar Mills, the Tribunal reiterated that although some guesswork is inevitable in best judgment assessments, the estimate must have a reasonable nexus to available material and cannot be capricious or vindictive.
The Tribunal particularly noted that the entire receipts were through banking channels from Government departments and even section 44AD recognizes 6% presumptive income for digital receipts. Therefore, flat estimation of 15% was held to be highly excessive and unjustified. The ITAT finally directed the AO to recompute income at 7% of the turnover declared by the assessee.
The Tribunal also condoned a substantial delay of 957 days in filing appeal before CIT(A), accepting the assessee’s explanation regarding family disputes, communication gaps with the relative handling tax matters and the fact that he became aware of proceedings only after bank account attachment. The ITAT emphasized that substantial justice should prevail over technicalities.
Further, the ITAT restored issues relating to Chapter VI-A deductions, TDS credit and self-assessment tax credit back to the AO for verification and proper allowance in accordance with law.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
These appeals at the instance of the assessee are directed against the separate orders of the ld. CIT(A)/NFAC both dated 4.12.2025 vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1083325287(1) for the AY 2017-18 and vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1083321492 (1) for the AY 2013-14 passed u/s. 250 of the Income Tax Act, 1961 (in short “the Act”). Since the issue in both these appeals is common in nature, these are clubbed together, heard together and disposed of by this common order for the sake of convenience and brevity.
2. For the sake of convenience, the assessee’s appeal in ITA No.161/Bang/2026 for the AY 2013-14 be treated and considered as the lead case in which the assessee has raised the following grounds of appeal:
3. The brief facts of the case are that on perusal of information regarding financial activities available on AIMS module of ITBA portal regarding NMS (Non-filer Monitoring System) having high risk criteria categorized, it was noticed by the AO that the assessee had contractual receipts of Rs.17,27,04,584/- and interest income of Rs.23,550/- during the financial year 2012-13. Despite of aforesaid transactions during the financial year 2012-13 related to AY 2013-14, the assessee did not file his return of income for AY 2013-14. Considering the above facts, a notice u/s 148 of the Act was issued on 31.3.2021 directing the assessee to file return of income within 30 days from the service of the notice in the prescribed form for the AY 2013-14. The AO was of the opinion that the provisions of clause (a) of explanation 2 to section 147 are applicable to facts of this case and the assessment year under consideration was deemed to be a case where income chargeable to tax has escaped assessment. In the present case, as four years was already lapsed from the end of the assessment year under consideration, the necessary sanction to issue notice u/s 148 of the Act was solicited from the Principal Commissioner of Income Tax, Bengaluru-1, Bengaluru as per provisions of section 151(1) of the Act.
3.1 In response to notice u/s 148 of the Act as well as reminder letter dated 12.11.2021, the assessee did not file his return of income for AY 2013-14. Subsequently, the notice u/s 142(1) of the Act was issued along with specific questionnaire. Thereafter, two reminder letters dated 17.01.22 & 31.01.2022 were also issued. Further, another notice u/s 142(1) was also served by the designated verification unit on 16.02.2022 through speed post. However, the assessee neither filed his return of income nor filed any reply to the aforesaid notices. The AO was of the opinion that as the assesse has been given ample opportunities vide notices u/s 148 and notices/reminders u/s 142(1) of the Act along with the show cause notices but the assessee did not furnish any reply to any of the notices issued and accordingly, the AO has left with no option but to complete the assessment proceedings ex-parte under the provisions of section 144(1) of the Act.
3.2 Thus, despite of huge contractual receipts of Rs. 17,27,04,584/- as the assessee had neither filed return of income nor filed any justification or reply in this regard, the AO treated the entire contractual receipts of Rs.17,27,04,584/- as turnover/business receipts for the year under consideration as the assessee is a contractor and has working with the government department where from he had received contractual receipts. The AO was also of the considered opinion that as the turnover of the Assessee exceeded the limit of Rs.1 Crores, the assessee was compulsorily liable to maintain his books of accounts and get them audited and offer the business receipts in the return of income. Since the assessee had neither furnished any details of books of accounts nor filed his return of income for the AY 2013-14, the AO was of the opinion that the net profit is required to be determined on estimation basis. Considering the nature of business, provisions of section 30 to 43B of the Act, the AO determined the net profit at Rs.2,59,05,690/- i.e. @ 15% of the total contractual receipts of Rs.17,27,04,584/-. Accordingly, a show cause notice in the form of draft assessment order was issued on 4.3.2022. In compliance, the assessee finally filed his reply on 10.3.2022.
3.3 The assessee along with his reply also furnished copy of 26AS along with the Statement of Income in which the assessee had declared a taxable profit of Rs.1,05,45,500/- on a total turnover of Rs.17,40,30,425/- (Profit margin of 6.06%) and the tax liability amounting to Rs.30,66,539/- was duly discharged as detailed below:-
Total tax liability for the period – Rs.30,66,539/-
TDS credit as appearing in Form 26AS Self assessment tax paid vide – Rs.26,51,922/-
challan dated 28.3.2016 – Rs. 7,00,000/-
3.4 The assessee also submitted that while arriving the net profit of Rs.1,05,45,500/-, depreciation of Rs.70,00,217/- has also been debited. Hence, the cash profit for the year i.e. profit before depreciation is Rs.1,75,45,719/- (works out to 10.08%). Further, the assessee submitted that the interest cost paid to bank had also not been included which can also be added back to arrive at the cash profit margin (after adding back depreciation & interest cost) which will go over 12%. Further, it is submitted that estimate of profit margin of 15% on the turnover by the AO is arbitrary in nature and without any valid basis. In this regard, the assessee relied upon the various decisions of the coordinate bench of the Tribunal.
3.5 The reply of the assessee was considered carefully by the AO but not found acceptable on merit since the assessee had neither filed his ITR originally nor in response to notice u/s 148 of the Act. Further, during the course of assessment proceedings, the assessee had also not furnished any details/documents as called for. In view of the above, the AO held that once the profit is determined on estimated basis, the assessee is not entitled to any further deduction as per provisions of section 30 to 43D of the Act. Therefore, the claim of depreciation as made by the assessee was rejected. Further, the AO observed that the assessee himself shown net business income of Rs.1,75,45,719/- before depreciation and the said net profit comes @10.16% of gross receipts. However, in the absence of any details and ITR, the profits declared by the assessee cannot be acceptable. Therefore, considering the above facts, the net profit of assessee was estimated @ 15% of gross contractual receipts and accordingly addition of Rs.2,59,05,690/-was made as estimated net business profit on total contractual receipts and added back to the total income of the assessee.
3.6 On further perusal of information available on AIMS module of ITBA portal, it was observed by the AO that the assessee had also earned interest income of Rs.23,550/- during the financial year 2012-13 relevant to AY 2013-14 on which TDS of Rs.2,355/- was deducted u/s 194A of the Act. The assessee in his submission dated 10.3.2022 filed along with the statement of income himself declared the taxable interest income of Rs.55,235/- earned during the year under consideration. Since the assessee himself accepted to had earned interest income of Rs.55,235/- during the year, the AO made the addition of Rs.55,235/- as interest income instead of Rs.23,550/-. Thus, the AO completed the assessment proceedings on a total assessed income of Rs.2,59,60,925/- u/s 147 r.w.s. 144 of the Act vide order dated 16.3.2022.
4. Aggrieved by the assessment order passed u/s 147 r.w.s. 144 of the Act dated 16.3.2022, the assessee preferred an appeal before the ld. CIT(A)/NFAC.
5. The ld. CIT(A)/NFAC on the one hand dismissed the appeal of the assessee in limine by not condoning the delay of 957 days and on the other hand also proceeded to decide the issues on merits of the case & upheld the order of the AO in full by not accepting any of the contentions of the assessee. The ld. CIT(A)/NFAC with regard to the estimation of net profit @ 15% on the turnover held that the AO was well within his jurisdiction to make honest estimate in absence of records. Courts have upheld higher NP rates (10-15%) where:-
- Books were not maintained.
- No voucher produced
- Cash – Intensive contract works involved.
Accordingly, the ld. CIT(A)/NFAC held that the AO’s adoption of 15% is a fair, reasonable, conservative estimate in the facts of this case.
5.1 Further, with regard to claim of deduction of Rs.1 lakh u/s 80C of the Act and Rs.10,000/- u/s 80TTA of the Act, the ld. CIT(A)/NFAC in the absence of proof of actual payment held that the deduction claims are rightly rejected by the AO. Lastly, with regard to the granting of credit for TDS and self-assessment tax, the ld. CIT(A)/NFAC held as follows:
1) The assessee never filed a return, hence no claim was made u/s 139 of the Act.
2) The assessee failed to produce the original self-assessment challan before the AO.
3) There is mismatch between the turnover in 26AS and turnover declared by the assessee.
4) The AO could not verify the claim owing to non-compliance and non-production of books.
In absence of proper return, supporting documents and reconciliation, the ld. CIT(A)/NFAC held that AO was justified in not granting the credit.
6. Again aggrieved by the order of the ld. CIT(A)/NFAC, the assessee has filed the present appeal before this Tribunal. The assessee has also filed voluminous paper books comprising 351 pages containing therein the various documents/records in support of his case. Further, the assessee by way of another paper book has also submitted the synopsis of written submissions along with the various case laws relied upon by the assessee.
7. Before us, at the outset, the ld. A.R. of the assessee vehemently submitted that there was sufficient cause in filing the appeal belatedly by 957 days before the ld. CIT(A)/NFAC. Further, the ld. AR submitted that the assessee is a civil contractor and working with the Government departments/PWD. It is also submitted that during the course of assessment proceedings, the assessee had submitted the statement of income by declaring the net profit of Rs.1,05,45,500/- after deducting depreciation as well as interest expenses on a total turnover of Rs.17,40,30,425/-, which is almost 6.06%. It is also submitted that the entire gross receipts were through the bank account of the assessee as all the contracts were with the government departments/PWD and accordingly prayed that the net profit @ 6.06% as declared by the assessee may be accepted. It is also submitted that even section 44AD of the Act prescribes presumptive taxation of 6% on gross turnover received through the bank accounts. Further, the ld. A.R. submitted that the AO has grossly erred in not allowing the deduction u/s Chapter VIA while computing net taxable income of the assessee. Further, the ld. AO has also grossly erred in not allowing the tax credit towards the TDS as well as self-assessment tax paid by the assessee and accordingly prayed to allow the appeal of the assessee.
8. The ld. D.R. on the other hand vehemently supported the orders of the Authorities below and vehemently submitted that there was no basis for arriving at the net profit of Rs.1,05,45,500/-especially when the assessee had neither maintained any books of accounts nor filed his return of income and the details submitted by way of statement of income is without any supporting evidences and accordingly prayed that the appeal may be dismissed. Further, with regard to non-granting of deduction under Chapter VIA as well as non-granting of TDS credit and self-assessment tax, the ld. D.R. fairly conceded that this issue may be remitted to the file of AO for proper examination and after taking into consideration the copies of actual investment made u/s 80C, Form 26AS, reconciliation statement & copy of Challan from the assessee, the AO may grant such credit in accordance with law.
9. We have heard the rival submissions and perused the materials available on record. On perusal of the Order of the ld. CIT(A)/NFAC, we observed that the ld. CIT(A)/NFAC dismissed the appeal of the assessee in limine by not condoning the delay of 957 days in filing the appeal before him. Before us, the ld. AR of the assessee drew our attention to a petition for condonation of delay dated 27/11/2024 & vehemently submitted that as the assessee was illiterate & not fully conversant with the intricacies of tax laws, he was fully dependent & relied on his brother in law who was managing the accounts & tax compliances matters. Unfortunately, due to the family disputes followed by Covid 19 pandemic as well as declining health of his elderly parents, there was a communication gap between the assessee & his brother in law. Further, all the communications related to tax proceedings were directed to the email-id of his brother in law & due to the family disputes, his brother in law did not communicate with the assessee regarding the notices issued & assessment order passed against the assessee. The assessee became aware of the passing of the assessment order only when his bank account was attached by the Department.
9.1 Having the heard the ld. Counsel for the assessee as well as the ld. D.R., it is perceived that the explanation offered in the condonation application is plausible and sufficient cause being shown by the assessee which prevented him from filing the appeal within the prescribed period. In our opinion, it cannot be said that the assessee is very callous in his approach in filing the appeal before the ld. CIT(A)/NFAC. Further, when substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserve to be preferred, for the other side cannot claim to have vested right for injustice being done because of non-deliberate delay. Moreover, no counter affidavit was filed by the revenue denying the claim made by the assessee. It is not the case of the revenue that the belated appeal was filed deliberately. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. Therefore, in our opinion, this is a fit case to condone the delay of 957 days in filing the appeal before the ld. CIT(A)/NFAC and accordingly, we are inclined to condone the delay and admit the appeal for adjudication.
10. It is an undisputed fact that in the present case, the assessee had neither filed his return of income u/s 139 of the Act nor in response to notice u/s 148 of the Act. It is also an undisputed fact that during the entire assessment proceedings, the assessee had neither submitted any books of accounts or documents/evidences nor complied with any of the notices issued u/s 142(1) of the Act as well as show cause notice u/s 144 of the Act. The assessee only in response to show cause notice in the form of draft assessment order had submitted the statement of income by declaring the total turnover amounting to Rs.17,40,30,425/- and the taxable profit of Rs.1,05,45,500/- (NP ratio of 6.06%). On perusal of the assessment order, we observed that the AO had applied profit margin of 15% on a total turnover of Rs.17,27,04,584/- in order to arrive at the estimated business profit of Rs.2,59,05,690/-. Thus, surprisingly, we observed that the assessee had declared turnover of Rs.17,40,30,425/- in his statement of income, however, the AO based on the information stick to a contractual receipts of Rs.17,27,04,584/-.
10.1 Further, on perusal of the assessment order, we also observed that the AO had completely misconstrued the reply dated 10/03/2022 furnished by the assessee. The assessee in his reply had categorically stated that in arriving the net profit of Rs.1,05,45,500/- the assessee had also debited depreciation amounting to Rs.70,00,217/- and hence, the cash profit for the year before depreciation will be Rs.1,75,45,719/-. In terms of percentage, the cash profit before deducting depreciation works out to 10.8%. Further, the assessee also submitted that had he not included the interest cost paid to bank which can also be added back to arrive at the cash profit margin (after adding back depreciation & interest) will go over to 12%. Thus, the assessee wanted to convey to the AO that by declaring net profit of Rs. 1,05,45,500/- (6.06% of the Turnover), he had in fact declared cash profit margin of over 12% from such contracts. The AO, surprisingly understood that the assessee is requesting to allow deduction of depreciation on assets and accordingly held that when the net profit rate to gross receipts is determined on estimation basis, no further deduction is to be allowed & therefore the claim of the depreciation made by the assessee was rejected. We are of the considered opinion that in the absence of books of account, information, evidences, the AO had no option but to conclude the assessment best of his judgment u/s 144 of the Act. However, we are also of the considered opinion that the estimation made by the assessee should not be a blunt arrow, fluke & blind guess & the estimation must be fair, reasonable and based on nature & type of business as well as industry margin. We are also of the consideration that the estimate must be related to some evidence or material and it must be something more than mere suspicion. The AO must take into consideration the local knowledge and repute in regard to the assessee’s circumstances and his own knowledge of previous returns by and assessments of the assessee and all other matters which he thinks will assist him in arriving at a fair and proper estimate. By holding so, we rely on the judgment of Hon’ble Supreme Court in the case of Brij Bhushan Lal Parduman Kumar v. Commissioner of Income-tax [1978] 115 ITR 524 (SC). The relevant portions of the Hon’ble Supreme Court judgment are extracted below for ease of reference:
“At the outset, it may be stated that in the case of both the assessees their returns and book results were rejected on the ground that proper and reliable books of account had not been maintained and the ITO was required to make the assessments on “best judgment” basis. However, the principles to be followed by the ITO while making a best judgment assessment have been clearly laid down by the Privy Council as also by this court in a number of decisions. In CIT v. Laxminarain Badridas [1937] 5 ITR 170 (PC) their Lordships of the Privy Council observed as follows:
“The officer is to make an assessment to the best of his judgment against a person who is in default as regards supplying information. He must not act dishonestly or vindictively or capriciously because he must exercise judgment in the matter. He must make what he honestly believes to be a fair estimate of the proper figure of assessment, and for this purpose he must, their Lordships think, be able to take into consideration local knowledge and repute in regard to the assessee’s circumstances, and his own knowledge of previous returns by and assessments of the assessee, and all other matters which he thinks will assist him in arriving at a fair and proper estimate; and though there must necessarily be guesswork in the matter, it must be honest guesswork. In that sense, too, the assessment must be, to some extent, arbitrary.”
Since the law relating to “best judgment assessment” is the same both in the case of income-tax assessment and sales tax assessment, the following observations of this court in Raghubar Mandal Harihar Mandal v. State of Bihar [1957] 8 STC 770 , 778 (SC), a case under the Bihar Sales Tax Act, would be material:
“No doubt it is true that when the returns and the books of account are rejected, the assessing officer must make an estimate, and to that extent he must make a guess; but the estimate must be related to some evidence or material and it must be something more than mere suspicion.”
Again in Stale of Kerala v. C. Velukutty [1966] 60 ITR 239 (SC), which was a case under the Travancore-Cochin General Sales Tax Act, Subba Rao J. (as he then was), speaking for this court, observed at page 244 of the report thus:
“The limits of the power are implicit in the expression ‘best of his judgment’. Judgment is a faculty to decide matters with wisdom truly and legally. Judgment does not depend upon the arbitrary caprice of a judge, but on settled and invariable principles of justice. Though there is an element of guesswork in a ‘best judgment assessment’, it shall not be a wild one, but shall have a reasonable nexus to the available material and the circumstances of each case.”
10.2 The Hon’ble Karnataka High Court in the case of Jayanthilal R. Tunk v. Commissioner of Income Tax & Anr. Reported in (1982) 028 CTR 0010 (Karn-HC) has held as under:-
“…… In the case of State of Orissa v. Maharaja Sri B. P. Singh Deo (1970) 76 ITR 690(SC), Hegde, J, as he then was, construing best judgment assessment under the Orissa Agrl. IT Act, 1947, held, that the power to levy assessment on the basis of best judgment was not arbitrary power; it was that assessment must be based on some relevant material. It was not a power that could be exercised under the sweet-will and pleasure of the concerned authorities. Similarly, in the case of Sheo Nath Singh v. AAC of IT (1971) 82 ITR 147 (SC) Hegde. J, as he then was, speaking for the bench while considering the words “reason to believe” occurring in s. 34 (1A) of the Act, held that those words suggested that the belief must be that of an honest and reasonable person based upon reasonable grounds and that the ITO may act on direct or circumstantial evidence but not on mere suspicion, gossip or rumour. It was further held that the ITO would be acting without jurisdiction if the reason for his belief that the conditions were satisfied did not exist or was not material or relevant or to the belief required by the section.
4. Mr. Desai argued on the basis of the above decisions that the ITO could only proceed after taking into account all relevant materials which he might have gathered and make assessment of the total income on the basis of his best judgment. In other words, his assessment without reference to any material gathered. He should not make his best judgment assessment on more suspicion, capriciously or arbitrarily. Even this Court in the case of S. Adappa v. Transport Commr. (1968) 2 Mys. LJ 581 : AIR 1969 Mys. 222 considering best judgment assessment provisions under the Karnataka Motor Vehicles (Taxation on Goods and Passengers) Act, 1961 held that best judgment assessment must be based on the material on record which could be gathered by the ITO on proper investigation.”
10.3 Further, the Hon’ble Karnataka High Court in the case of Sri Shankar Khandasari Sugar Mills v. Commissioner of Income-tax reported in (1992) 193 ITR 669 (Karn-HC) again reiterated that the order under section 144 of the Act is to be made to the best of the judgment of the ITO; which means, the order has to be rational and is to be based on an honest guesswork for which, some valid basis is available to the ITO. The order involves exercise of ‘judgment’ by the Officer. A fair estimate of the income has to be made. Further, the Jurisdictional High Court held that Guesswork is inevitable; but, it cannot be wild guess; the guesswork should have a reasonable nexus to the available material and the circumstances of each case.
10.4 Now coming to the present facts of the case, we find force in the contention of the AR of the assessee that the assessee is a civil contractor and the entire contract receipts were from government departments/PWD as can be verified from form 26AS and all the proceeds were received through proper banking channels on which the tax had been deducted at source. On perusal of the assessment order, we also noticed that in absence of any details/evidences filed by the assessee, the AO has estimated the income of the assessee @ 15% by holding that once the profit is determined on estimated basis, the assessee is not entitled to any further deduction as per provisions of section 30 to 43D of the Act by relying on the various orders of the Co-ordinate Bench of Tribunal & Hon’ble High Courts. The AO also held that when the net profit rate to gross receipts of the assessee is determined on estimation basis, no further deduction is to be allowed. Thus, the AO while applying the net profit @15% was guided by the provisions of section 44AD only & held that once the profit is determined on estimated basis, the assessee is not entitled to any further deduction as per provisions of section 30 to 43D of the Act as contained in section 44AD of the Act. We are of the considered opinion that the AO estimated the profit of the assessee @15% without reference to any material gathered. The AO should not make his best judgment assessment on mere suspicion, impulsively or arbitrarily. We are also of the considered opinion that the best judgment assessment must be based on the material on record which could be gathered by the AO on proper investigation. In the present case, the assessee’s entire contractual receipts were from Government department & all proceeds were received through banking channel & thus the assessee’s estimation of the net profit @ 6.06% of the turnover is higher than the rate of 6% prescribed u/s 44AD of the Act. We are of the view that flat 15% income on turnover is highly unjustified. However, We are of the considered opinion that net profit rate of 7% in civil contract business especially when all the contract receipts were received through proper banking channel on which the tax has been deducted at source is a reasonable one and accordingly direct the AO to recompute the net profit of the assessee @7% of the total turnover declared by the assessee i.e. Rs.17,40,30,425/-. Accordingly, this ground of Appeal of the assessee is partly allowed.
11. Now with regard to the ground relating to denial of deductions u/s 80C as well as 80TTA of the Act, the ld. AR of the assessee submitted that the assessee in his statement of income had declared the Income from Other Sources amounting to Rs.55,235/-, which includes interest from Savings Bank of Rs.18,887/-. The AO while passing the Assessment Order has considered the Income from Other Sources at Rs.55,235/- against Rs.23,550/- as proposed by the AO in the Show cause Notice. Thus, the assessee is also eligible for deduction U/s 80TTA of the Act amounting to Rs.10,000 on the Interest on Savings bank amounting to Rs.18,887 included in the Income from Other Sources. Further, the AR of the assessee submitted that during the year under consideration, the assessee had also made payment of Rs.1,50,500 to Max New York Life insurance which is eligible for deduction U/s 80C of the I.T. Act to the extent of Rs.1,00,000. Thus, the assessee claimed Chapter VI-A deductions of Rs.1,10,000/- in his statement of income filed, however the AO while passing the assessment order did not allow the eligible deduction while computing the net taxable income of the assessee.
11.1 Further, the ld. AR of the assessee contended that in the computation sheet served along with the assessment order, the AO had taken the prepaid taxes as Nil, whereas during the course of assessment proceedings, the assessee had submitted the statement of income along with copy of 26AS in which the total TDS of Rs.26,51,922/- & Self assessment tax paid of Rs.7,00,000/- on 28/03/2016 is clearly reflected.
12. We are of the considered opinion that as the assessee could not represent his case before the AO & submit all the necessary evidences such as copy of premium paid towards Max New York Life Insurance, Copy of SB passbook/statement evidencing SB Interest, Copy of the self assessment challan as well as copies of TDS Certificates/Form 26AS along with reconciliation if any, we deemed it fit & proper to remit this issue to the file of the AO to examine & verify the same & allow deductions under chapter VI-A in accordance with law. Further, the AO is also directed to give credit of TDS amounting to Rs.26,51,922/- & Self Asst. Tax of Rs.7,00,000/- after obtaining the copy of the challan & TDS Certificates/26AS from the assessee. Needless to say, reasonable opportunity of being heard must be granted to the assessee. It is ordered accordingly. Accordingly, these grounds of appeal of the assessee are partly allowed for statistical purposes.
13. In the result the appeal of the assessee is partly allowed for statistical purposes.
14. Now, the assessee has raised the following grounds of appeal in ITA No.160/Bang/2026 for the AY 2017-18:-
15. Since the grounds raised as well as issues involved in this appeal is exactly similar to that appeal in ITA No. 161/Bang/2026 except change in figures, the findings & result of ITA No. 161/Bang/2026 for the AY 2013-14 will mutatis-mutandis apply to this appeal also.
16. Accordingly, this appeal of the assessee is also partly allowed for statistical purposes.
Order pronounced in the open court on 19th May, 2026
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