CHANDRAN VIJAYA,NAMAKKAL V. ITO, WARD-1(3), SALEM

ITA 1703/CHNY/2025

AI Insights

The case involves Smt. Chandran Vijaya, the appellant, contesting an addition of Rs.12,55,000 made by the Income Tax Officer under section 69A of the Income Tax Act, 1961, for unexplained cash deposits in her bank account during the assessment year 2011-12. The Income Tax Officer had initially added this amount as unexplained credit after scrutinizing bank deposits and allowing only a portion attributed to the sale of agricultural land. The First Appellate Authority upheld this addition. However, upon appeal to the Income Tax Appellate Tribunal, the addition was reduced significantly after applying the peak credit method and considering the sale proceeds and past savings.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775825 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 13-06-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: Y. SUDARSHAN
• Assessee Lawyers: T.S. LAKSHMI VENKATARAMAN
• Keywords: Unexplained cash credit; Peak credit
• Section: 147; 133(6)

Judgement Text

"आयकर अपीलीय अिधकरण, ‘बी’ (एस एम सी), ᭠यायपीठ,चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ (SMC) BENCH, CHENNAI ᮰ी जॉजᭅ जॉजᭅ, उपा᭟यᭃ के समᭃ BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT आयकर अपील सं./ITA No.: 1703/CHNY/2025 िनधाᭅरण वषᭅ/Assessment Year: 2011-12 Smt. Chandran Vijaya, 6/15, Kudistreet, Vettambadi, Namakkal – 637 405. PAN: AIKPV 8908Q Vs. The Income Tax Officer, Ward 1(3), Salem. (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri T.S. Lakshmi Venkataraman, Advocate ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri Y. Sudarshan, JCIT सुनवाई कᳱ तारीख/Date of Hearing : 09.09.2025 घोषणा कᳱ तारीख/Date of Pronouncement : 11.09.2025 आदेश/ O R D E R This appeal filed by the assessee is directed against the order of Addl/JCIT(A)-1, Vadodara dated 19.05.2025 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2011-12. 2. The solitary issue raised is whether the First Appellate Authority (FAA) is justified in confirming the addition of Rs.12,55,000/- made by the AO u/s.69A of the Act. Printed from counselvise.com ITA No.1709/Chny/2025 :- 2 -: 3. Brief facts of the case are as follows: The AO in the assessment order dated 23.12.2019 passed u/s.144 r.w.s. 147 of the Act made addition of Rs.12,55,000/- u/s.69A of the Act. The relevant finding of the AO for making the addition of Rs.12,55,000/- reads as under: 6. During the course of assessment proceedings, the bank account pertaining to you had been identified and a letter has been addressed to the concerned banks under Section 133(6) of the Income Tax Act.1961 and the same were obtained. On perusal of the bank statement, it is found that assessee had deposited the cash of Rs.17,50,000/-various days in account maintained with Bank of India. The husband of the assessee Shri. R.Chandran has visited to office and submitted the details of the sale of the agriculture land. The sale value of the agriculture land was Rs.4,90,000/-. Hence same is allowed. On analysis of the bank account, no specific pattern found. Taking into account all the factors, the assessee's total income for the A.Y.2011-12 is to be determined as following paras. 7. In the bank account, there is total cash deposit of Rs.17,50,000/-. As discussed in para-6, the sale proceeds of Rs.4,90,000/- is allowed as the source for the cash deposits but assessee has failed to file the return and submit the explanation of the rest of the cash deposits of Rs.12,55,000/-. Hence the cash deposits of Rs.12,55,000/- in the bank account is treated as 'Unexplained Credit within the meaning as per the Income Tax Act, 1961 and the same is brought to tax u/s.69A of the Income Tax Act, 1961 for A.Y. 2011-12, under the head income from other sources. (Addition:- Rs.12,55,000/-) 3. Aggrieved by the assessment completed, assessee filed appeal before the FAA. The FAA dismissed the appeal of the assessee. Printed from counselvise.com ITA No.1709/Chny/2025 :- 3 -: 4. Aggrieved by the order of the FAA, the assessee has filed the present appeal before the Tribunal. The only contention of the Ld.AR is that the peak credit of Rs.12,00,000/- in the bank account as on 11.05.2010 can only be considered and therefrom due credit ought to be given for the sale receipt of agricultural land and past savings. The copy of statement of bank account is placed on record. The Ld.AR candidly admitted that the cash deposits made in the month of May 2010 is on-money received on sale of agricultural land. It was submitted that reasonable set-off may also be given for the prior saving of the assessee taking into account the agricultural land holding of the assessee and also the fact that assessee is engaged in the business of multilevel marketing. 5. The Ld.DR supported the orders of the AO and the FAA. 6. I have heard rival submissions and perused the material on record. The solitary issue involved is regarding the addition made u/.69A of the Act amounting to Rs.12,55,000/- being deposits made in the book of account, which was sustained by Printed from counselvise.com ITA No.1709/Chny/2025 :- 4 -: the FAA. The total cash deposits for the relevant assessment year are detailed below:- Date Amount 11.05.2010 7,00,000 11.05.2010 5,00,000 27.07.2010 1,00,000 19.10.2010 10,000 08.11.2010 1,50,000 09.11.2010 65,000 16.11.2020 2,00,000 17,25,0000 7. The total cash deposit of Rs.17,25,000/- is taken at the figure of Rs.17,50,000/- by the AO and after giving set-off of Rs.4,90,0000/- being the sale receipts of agricultural land, a sum of Rs.12,55,0000/- was added u/s.69A of the Act. The agricultural land has been sold on 26.04.2010 for which guideline value is Rs.14,81,500/-. 8. On perusal of the bank statement that is placed on record, I find the peak credit in the bank account is Rs.12,00,000/- as on 11.05.2010. I’m of the view that only the peak credit should be brought to tax after setting off the sale consideration received by the assessee amounting to Rs.4,90,000/- for the sale of agricultural land. Out of the balance sum of Rs.7,10,000/-, further sum of Rs.2,10,000/- is to be given credit for past Printed from counselvise.com ITA No.1709/Chny/2025 :- 5 -: savings considering agricultural holding of assessee and also for the fact that assessee is into the business of multi-level marketing. Therefore, the balance sum of Rs.5,00000/- is sustained and added u/s.69A of the Act instead of addition of Rs.12,55,000/- made by the AO and confirmed by the FAA. It is ordered accordingly. 9. In the result, the appeal filed by the assessee is partly-allowed. Order pronounced in the open court on 11th September, 2025 at Chennai. Sd/- (जॉज[ जॉज[ क े) (GEORGE GEORGE K) उपाÚय¢ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 11th September, 2025 RSR आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy to: 1. अपीलाथȸ/Appellant 2. Ĥ×यथȸ/Respondent 3. आयकर आयुÈत /CIT, Salem 4. ͪवभागीय ĤǓतǓनͬध/DR 5. गाड[ फाईल/GF. Printed from counselvise.com "