ARAVINDAKSHAN NAIR,KOLLAM V. ITO, WARD 1 & TPS, , KOLLAM

ITA 775/COCH/2024

AI Insights

The case involves Aravindakshan Nair, an individual engaged in the business of money lending, who did not file a return of income for the Assessment Year 2013-14. The Income Tax Officer (ITO) issued a notice under section 148 of the Income Tax Act, 1961, based on information about cash deposits in the appellant's bank account, suspecting income had escaped assessment. The AO completed the assessment, estimating the income from the money lending business at 8% of the total turnover/credits, which amounted to Rs. 2,11,63,843. The appellant appealed to the Commissioner of Income Tax (Appeals), who upheld the AO's decision. Dissatisfied, the appellant approached the Income Tax Appellate Tribunal, which found the AO's estimation method unclear and lacking a basis in the assessee's past income or comparable businesses, leading to the remand of the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474705 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Assessee Lawyers: R. KRISHNAN
• Section: 147; 148; 139(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM ITA No. 775/Coch/2024 Assessment Year: 2013-14 Aravindakshan Nair .......... Appellant Pettee Veetil Puthen Veedu Padinjattakara, Thavalakkara West Karunagapply, Kollam 690524 [PAN: AGXPN7763L] vs. The Income Tax Officer .......... Respondent Ward - 1 & TPS, Kollam Appellant by: Shri R. Krishnan, CA Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 05.02.2025 Date of Pronouncement: 10.02.2025 O R D E R This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-13, Mumbai [CIT(A)] dated 08.08.2024 for Assessment Year (AY) 2013-14. 2. Brief facts of the case are that the assessee is an individual engaged in the business of money lending. No return of income was filed for AY 2013-14 u/s. 139(1) of the Income Tax Act, 1961 (the Act). Based on the information that the appellant made cash deposit in bank account, the Income Tax Officer, Ward-1 (hereinafter called 2 ITA No. 775/Coch/2024 Aravindakshan Nair \"the AO\") formed an opinion that income escaped assessment to tax. Accordingly, a notice u/s. 148 of the Act was issued on 30.03.2021. In response to the notice u/s. 148 return of income for AY 2013-14 was filed disclosing income of Rs. 1,97,600/-. Against the said return of income, the assessment was completed by the AO vide order dated 25.03.2022 passed u/s. 147 r.w.s. 144B of the Act at a total income of Rs. 16,93,109/-. While doing so, the AO estimated the income from business of money lending @ 8% on the total turnover/credits of Rs. 2,11,63,843/-. 3. Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO. 4. Being aggrieved, the appellant is in appeal before us in the present appeal. 5. The learned A.R. submitted that the AO erred in treating the entire cash deposits as income of the appellant. It is further submitted that estimation of income at 8% of the turnover is without any basis. Thus, he submitted that the assessment order as confirmed by the CIT(A) is not based on actual income of the assessee but an arbitrary assessment. Therefore, the matter may be sent back to the AO for fresh adjudication. 6. Having heard the both the parties, I am of the considered opinion that the matter requires remand to the AO as the estimation of income on the basis of turnover adopted by the AO is not clear. 3 ITA No. 775/Coch/2024 Aravindakshan Nair The estimation of income is not based on past history of the assessee or on comparables, which are in the similar lines of business. Therefore I remand the matter back to the file of the AO for fresh assessment in accordance with law. 7. In the result, the appeal filed by the assessee stands allowed for statistical purposes.. 8. Order pronounced in the open court on 10th February, 2025. Sd/- (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 10th February, 2025 n.p. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin "