ASHOK KUMAR MAHADEV,COIMBATORE V. ITO, NCW4(2), COIMBATORE

ITA 729/CHNY/2024

AI Insights

Mr. Ashok Kumar Mahadev, an astrologer by profession, appealed against the order of the Learned Commissioner of Income Tax (Appeals), Delhi, which confirmed the addition of \\u20b918 lakhs as unexplained money during the demonetization period under section 69A of the Income Tax Act, 1961. The Assessing Officer (AO) had initially treated the excess cash deposits of \\u20b930 lakhs during the demonetization period as unexplained, after estimating the cash available with the assessee as \\u20b912 lakhs on the day prior to demonetization. The Tribunal noted that the assessee had provided details of loans given to various parties, which were returned during the demonetization period, and found that the lower authorities had not adequately considered this evidence.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 107136 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-08-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 20-03-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOUTHAMI
• Assessee Lawyers: H. YESHWANTH KUMAR
• Keywords: Corroborative evidences

Judgement Text

"आयकर अपीलीय अिधकरण, ‘बी’ \u0001यायपीठ, चे\tई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI \u0001ी एबी टी. वक , \u000bाियक सद\u0011 एवं एवं एवं एवं \u0001ी अिमताभ शु\u0018ा, लेखा सद\t क े सम\u001b BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.729/Chny/2024 िनधा\u000eरण वष\u000e/Assessment Year: 2017-18 Mr. Ashok Kumar Mahadev, 5/478A, Postal Colony, Perur Chettipalayam, Coimbatore-641 010. v. The ITO, NCW-4(2), Coimbatore. [PAN: BNKPM 1907 N] (अपीलाथ\u0016/Appellant) (\u0017\u0018यथ\u0016/Respondent) अपीलाथ\u0016 क\u001a ओर से/ Appellant by : Mr.H. Yeshwanth Kumar, CA \u0017\u0018यथ\u0016 क\u001a ओर से /Respondent by : Smt. Gouthami- Manivasagam, JCIT सुनवाईक\u001aतारीख/Date of Hearing : 06.08.2024 घोषणाक\u001aतारीख /Date of Pronouncement : 09.10.2024 आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter in short \"the Ld.CIT(A)”), Delhi, dated 25.01.2024 for the Assessment Year (hereinafter in short \"AY”) 2017-18. 2. The main grievance of the assessee is against the action of the Ld.CIT(A) confirming the addition of ₹18 lakhs being cash deposits made during demonetization period as unexplained money u/s.69A of the Income Tax Act, 1961 (hereinafter in short ‘the Act’). ITA No.729/Chny/2024 (AY 2017-18) Mr. Ashok Kumar Mahadev :: 2 :: 3. The brief facts are that the assessee is an individual, who filed his return of income (RoI) for AY 2017-18 on 29.01.2018 admitting total income of ₹8,04,390/-. Later, the case of the assessee was selected for scrutiny and the AO noted that the assessee had deposited cash to the tune of ₹30 lakhs in the bank a/c maintained with Bank of Baroda, Coimbatore during demonetization period on three (3) occasions (14th, 16th & 18th November, 2016). The AO asked the assessee to furnish nature and source of the cash deposits with supporting evidence. Pursuant thereto, the assessee submitted his income & expenditure account for the year ended 31.03.2016 & 31.03.2017 and also balance sheet as on 31.03.2016 & 31.03.2017. According to the AO, the assessee didn’t furnish the details of the cash available with him as on 08.11.2016 (i.e. a day prior to demonetization). Therefore, from the details furnished before him, he worked out the cash balance as on the date of demonetization (i.e. 08.11.2016) as under:- Particulars Amount Rs. Cash at Bank and on hand as on 31.03.2016 (Rs. 1,000 + 5,25,800) as per Balance Sheet furnished by the assessee as on 31.03.2016 5,26,800 Add: The assessee has shown total receipts of Rs. 10,83,749/- for the F.Y. 2016-17. Therefore, the proportionate receipts upto 31.10.2016 (7 months) works out to Rs. 6,32,187 (10,83,749/12 x 7) 6,32,187 Estimated cash available with the assessee as on 01.11.2016 11,58,987 Add: Extra credit given to the assessee from 01.11.2016 to 08.11.2016 41,013 Estimated cash available with the assessee as on 08.11.2016 12,00,000 ITA No.729/Chny/2024 (AY 2017-18) Mr. Ashok Kumar Mahadev :: 3 :: And since, the assessee had deposited cash of ₹30 lakhs during demonetization period, whereas, the cash balance according to the AO as on 08.11.2016 was ₹12 lakhs, the balance amount of ₹18 lakhs (Rs.30 lakhs minus Rs.12 lakhs) was treated as unexplained money u/s.69A of the Act. 4. Aggrieved, the assessee preferred an appeal before the Ld.CIT(A) who confirmed the action of the AO. 5. Aggrieved, the assessee is in appeal before this Tribunal. 6. We have heard both the parties and perused the material available on record. We note that the assessee is an astrologer by profession and has returned an income of ₹8,04,390/- for AY 2017-18. And since, he had deposited ₹30 lakhs during demonetization period, the AO asked him to explain the nature & source of the same; and the assessee filed the details like income & expenditure account as on 31.03.2016 & 31.03.2017 and also the balance sheet as on 31.03.2016 & 31.03.2017. Since, the assessee couldn’t furnish the details of the cash available with him as on 08.11.2016, the AO estimated the cash available with assessee as on 08.11.2016 at ₹12 lakhs and directed the assessee to prove the nature & source of balance amount of ₹18 lakhs, which according to the AO, the assessee couldn’t explain. So he added it u/s.69A of the Act. On appeal, ITA No.729/Chny/2024 (AY 2017-18) Mr. Ashok Kumar Mahadev :: 4 :: the assessee submitted that ten (10) parties borrowed money from him had returned the same (loan-amount) during the year under consideration, which has been deposited during the demonetization period along with the cash in hand as on 08.11.2016 from the profession of Astrology. The name of the lenders/PAN as on 31.03.2016 (AY 2016-17) is as under:- ASHOK KUMAR MAHADEV DETAILS OF LOANS & ADVANCES AS ON 31-03-2016 Sl. No. NAME AND ADDRESS OF THE PARTY PAN AMOUNT RS 1 DURAISAMY R. 1/2 MYLANKATTUR, SATHIYANAICKAN PALAYAM KUMARAMANGALAM, THIRUCHENGODU AVMPD67988 200000 2 ARUNKUMAR D, 1/2 MYLANKATTUR, SATHIYANAICKAN PALAYAM, KUMARAMANGALAM, THIRUCHENGODU BTSPA5937L 160000 3 VADIVEL S. D113, NAPIRAMPATTI, UTHANGARAI, KRISHNAGIRI AWNPV2150K 160000 4 VIPUL NM VARYA THAZHAM, PAYAMBRA, KURIJVATOOR KOZHIKODE BFTPV9635M 120000 5 SETTU V D113. NAPIRAMPATTI UTHANGARAI KRISHNAGIRI HJQPS0615R 200000 6 MEKALA R. 127 C. NGR STREET, KALAPPATI, COIMBATORE AJGPM9391R 150000 7 NAGARAJ K 200 8TH STREET, BHAKTAVATSALAM NAGAR, KAILASAMPALAYAM, THIRUCHENGODU AUFFN90450 150000 8 SUBRAMANIAN C 0113, NAPIRAMPATTI, UTHANGARAI KRISHNAGIRI GGIPS9197G 100000 9 NAGARAJAN U. 17, BOOPATHIRAJA NAGAR, POOCHIYUR DEENAMPALAYAM COIMBATORE AFCPN6900M 200000 10 ASHOK KUMAR M. 5/478 POSTAL COLONY, PERUR CHETTIPALAYAM, COIMBATORE (FATHER) NO PAN 500000 TOTAL 1950000 ITA No.729/Chny/2024 (AY 2017-18) Mr. Ashok Kumar Mahadev :: 5 :: 7. The Ld.CIT(A) taking note that no enquiry regarding the aforesaid fact was made during the course of assessment proceedings, he called for Remand Report from the AO, who issued notices to the assessee and acknowledges that they all received the notices, but failed to give confirmation to him (AO) about the loan taken from assessee and gave such a report to Ld CIT(A). 8. However, the assessee controverted the aforesaid remand-report, and instead, brought to our notice that nine (9) parties among ten (10) had given their confirmation via online on 29.07.2022 (one person died) and forwarded a copy of the same to the Ld.CIT(A), which fact the Ld.CIT(A) acknowledges at Page No.9 of his order. After going through the replies given through online of nine (9) persons (except Mr.Ashok Kumar .M who has taken loan of ₹5 lakhs, with no PAN details), the Ld.CIT(A) acknowledged that out of nine (9) creditors, five (5) didn’t file any return of income; and the replies was similar, he wasn’t convinced; and in addition, he noted from the return of income of the assessee for AY 2016-17 that there were no debtors shown in the return of income for AY 2016-17 i.e. amount of total sundry creditors were ‘zero’ at column No.2.7. Therefore, he wasn’t convinced with the aforesaid explanation and confirmed the action of the AO making addition of ₹18 lakhs u/s.69A of the Act. Before us, the Ld.AR filed the income & expenditure account ITA No.729/Chny/2024 (AY 2017-18) Mr. Ashok Kumar Mahadev :: 6 :: for the year ended 31.03.2016 as well as the balance-sheet as on 31.03.2016 (preceding year) which is reproduced as under:- BALANCE SHEET AS ON 31ST MARCH 2016 Liabilities Amount Assets Amount God's Account 101.00 ADVANCES AND DEPOSITS PROPRIETOR CAPITAL ACCOUNT Loan Given to Various Parties 1,950,000.00 A. Mahadev 1,451,689.00 Add:Net Profit for the year 1,025,010.00 --------------- 2.476,699.00 CASH AND BANK BALANCES Bank accounts 1,000.00 Cash 525,800.00 TOTAL ----------------- ₹2.476.800.00 ----------------- TOTAL ----------------- ₹2,476,800.00 ----------------- 9. From the perusal of the balance-sheet, it would reveal that assessee has shown advance and deposits (loan given to various parties as ₹19,50,000/-) and cash on hand as on 31.03.2016 as ₹5,25,800/- which the AO has taken note for making estimation of cash as on 08.11.2016. We also note that the assessee had filed the ITR copies for AY 2015-16 which shows the assessee has shown total income of ₹7,67,030/- and return of income for AY 2016-17 at ₹9,96,410/- and for AY 2017-18 at Rs.8,04,390/-. Having noted that the AO has taken note of the cash-on- hand as on 31.03.2016 at ₹5,25,800/-, he ought not have ignored the loans and advances shown to have been given by the assessee to the tune of ₹19,50,000/-. The assessee has filed the details of ten (10) ITA No.729/Chny/2024 (AY 2017-18) Mr. Ashok Kumar Mahadev :: 7 :: parties to whom the assessee had given loan as noted supra. A perusal of the same would reveal that out of ten (10) creditors, nine (9) have given their PAN details and only one person (i.e. Mr.Ashok Kumar) doesn’t have PAN. We note that the AO had issued notices through post which have been served upon them. It is noted that except one borrower (Mr.Ashok Kumar) who has taken a loan of ₹5 lakhs, all others have given their replies through online which has been reproduced by the Ld.CIT(A). Only five (5) out of nine (9) parties, didn’t file the return of income can’t be the ground for disbelieving their identity, when all of them have furnished their PAN details and notices have been served on them through post. The amounts given to these creditors are noted to be small amounts ranging from ₹1.60 lakhs to ₹2 lakhs. Therefore, we direct deletion of ₹14.5 lakhs received from nine creditors, and confirm the balance addition of ₹3.5 lakhs. 10. In the result, appeal filed by the assessee is partly allowed. Order pronounced on the 09th day of October, 2024, in Chennai. Sd/- (अिमताभ शु\u0018ा) (AMITABH SHUKLA) लेखा सद\u0003य/ACCOUNTANT MEMBER Sd/- (एबी टी. वक ) (ABY T. VARKEY) \u0005याियक सद\u0003य/JUDICIAL MEMBER चे\tई/Chennai, !दनांक/Dated: 09th October, 2024. TLN, Sr.PS ITA No.729/Chny/2024 (AY 2017-18) Mr. Ashok Kumar Mahadev :: 8 :: आदेश क\u001a \u0017ितिलिप अ$ेिषत/Copy to: 1. अपीलाथ\r/Appellant 2. \u000e\u000fथ\r/Respondent 3. आयकरआयु\u0015/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय\u000eितिनिध/DR 5. गाड\u001eफाईल/GF "