आयकर अपील(cid:547)य अ(cid:876)धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ B ‘ Bench, Hyderabad (cid:302)ी (cid:874)वजय पाल राव, उपाÚ य¢ एवं (cid:302)ी मंजुनाथ जी, लेखा सदè य के सम¢ ।

Before Shri Vijay Pal Rao, Vice-President AND Shri Manjunatha G. Accountant Member आ.अपी.सं /ITA Nos.2304 & 2305/Hyd/2025 (िनधा१रण वष१/Assessment Years: 2018-19 & 2019-20)

M/s. MSN Laboratories Vs. Assistant Commissioner Private Limited, Hyderabad of Income Tax PAN:AADCM6283F Central Circle 2(4)

Hyderabad (Appellant) (Respondent)

िनधा१ौरती (cid:554)ारा/Assessee by: Shri M.V. Prasad, CA राज(cid:830) व (cid:554)ारा/Revenue by: Dr. Sachin Kumar, Sr. AR सुनवाई की तारीख/Date of hearing: 21/01/2026 घोषणा की तारीख/Pronouncement: 25/02/2026 आदेश/ORDER Per. MANJUNATHA, G. A.M.

These two appeals filed by the assessee are directed against the separate orders passed by the Learned Commissioner of Income Tax (Appeals)-12, Hyderabad, both dated 04.11.2025, for the A.Ys 2018-19 & 2019-20 respectively. Since identical issues are involved in these two appeals, for the sake of convenience, these appeals were heard together and are being disposed off, by this common consolidated order.

ITA No. 2304/Hyd/2025 A.Y 2018-19

2. The assessee has raised the following grounds of appeal:

3. The brief facts of the case are that the assessee company is engaged in manufacturing of bulk drugs and formulation products, filed its return of income for the A.Y 2018- 19 on 29/11/2018 admitting total income of Rs.59,39,27,230/-. A Search and seizure operations u/s 132 of the Income Tax Act, 1961 was carried out in M/s MSN Group of cases on 24-02-2021 and the assessee is part of the MSN Group companies, is also covered u/s 132 of the I.T. Act, 1961. During the course of search, at registered and corporate office of the assessee on 24.02.2021, it was found that used solvents in the form of effluents/recovered waste/spent solvents were sold to vendors in unorganized sector, mostly in cash. From a Sony make Pen drive of 16GB (seized as Annex. A/MSN/OFF/HD1) found in the possession of Sri B. Buchi Reddy, Cashier, which contain various Excel sheet data, it was made out that the spent solvents/scrap were sold in cash and such transactions were not recorded in the books of account. The evidences found during the course of search in the case of the assessee were confronted and a statement under section 132(4) of the Act was recorded from Sri B Buchi Reddy. The statement recorded from the Cashier was put before the M.D. of the assessee company Shri M.S.N. Reddy and a statement was recorded on 27/02/2021. In his statement, the MD admitted that there are errors in the books and requested time to reconcile the same. Thereafter, in the statement recorded under section 132(4) of the Act dated 27/04/2021 at the registered office of the assessee company, additional income towards unaccounted cash receipts from sale of spent solvent and scrap was admitted. In line with the admission made during the course of search, the assessee company admitted Rs.6,77,03,448/- as additional income towards unaccounted sale of spent solvent and scraps for the year under consideration.

4. Consequent to the search, notice under section 153A of the Act dated 5/10/2021 was issued and served on the assessee. In response, the assessee filed its return of income on 2/11/2021 declaring total income of Rs.67,30,91,940/-. In the return filed under section 153A of the Act, the assessee had admitted the following additional income:

5. The case of the assessee was selected for scrutiny and during the course of assessment proceedings, the A.O on the basis of incriminating material found during the course of search coupled with the admission of additional income in the return of income filed under section 153A of the Act, has assessed the additional income of Rs.6,77,03,448/-. Further, the A.O had also assessed the additional income returned by the assessee in the return of income filed under section 153A of the Act tow