INCOME TAX OFFICER, NON CORPORATE WARD-3(1) CBE, COIMBATORE V. KSK COLD STORAGE, METTUPALAYAM

ITA 3330/CHNY/2024

AI Insights

The case involves an appeal by the Income Tax Officer against KSK Cold Storage concerning the assessment year 2017-18. The primary issue was the addition of ₹3,83,00,999 as unexplained investment in immovable property by the Assessing Officer, which was later contested. The CIT(A) removed this addition after the assessee provided evidence during remand proceedings, showing that the investment was financed through bank loans. The Revenue appealed against this decision, arguing that the CIT(A) did not adequately verify the creditworthiness of the partners who financed the property purchase. The Tribunal dismissed the Revenue's appeal, agreeing with the CIT(A)'s findings.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 716896 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 26-12-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Keywords: Unexplained cash credit
• Section: 147; 148; 68; 69

Judgement Text

"आयकर अपीलीय अिधकरण, ’बी’ Ɋायपीठ,चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI ŵी एस. एस. िवʷनेũ रिव,Ɋाियक सद˟ एवं ŵी जगदीश,लेखा सद˟ क े समƗ। Before Shri S.S. Viswanethra Ravi, Judicial Member & Shri Jagadish, Accountant Member आयकर अपीलसं./I.T.A.No.3330/Chny/2024 िनधाŊरण वषŊ/Assessment Year: 2017-18 The Income Tax Officer, Non Corporate Ward 3(1), Coimbatore. Vs. KSK Cold Storage, 685, Jadayampalayam Village, Mettupalayam, Coimbatore 641 301. [PAN:AARFK3964G] (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से/ Appellant by : Shri Shiva Srinivas, CIT ŮȑथŎ की ओरसे/Respondent by : None सुनवाई की तारीख/Date of hearing : 30.07.2025 घोषणा की तारीख /Date of Pronouncement : 20.08.2025 आदेश /O R D E R PERS.S. VISWANETHRA RAVI, JUDICIAL MEMBER: This appeal filed by the Appellant-Revenue is directed against the order dated 28.10.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2017-18. 2. When the appeal was taken up for hearing on 30.07.2025, we find no representation on behalf of the assessee. Further, the notice issued by this Tribunal to the assessee returned unserved with an Printed from counselvise.com ITA No. 3330/Chny/24 2 endorsement “no such person in this address”. Therefore, the assessee is called absent and set exparte and we proceed to decide the appeal on merits after hearing the ld. DR basing on the material available on record. 3. Brief facts relating to the case are that according to the Assessing Officer and as per information available with the Department, the assessee had undertaken financial transactions such as purchase of immovable property and made payment at ₹.3,83,00,999/- and the assessee did not file income tax return for the assessment year under consideration. Accordingly, after following due procedure, the Assessing Officer issued notice under section 148 of the Income Tax Act, 1961 [“Act” in short]. In the absence of any replies or submissions supported with credible documentary evidence, the Assessing Officer completed the assessment under section 147 r.w.s. 144 r.w.s. 144B of the Act determining taxable income of the assessee at ₹.3,83,00,999/-. On appeal, after considering the remand report and examining evidence furnished by the assessee, the ld. CIT(A) deleted the addition made by the Assessing Officer under section 69 r.w.s. Printed from counselvise.com ITA No. 3330/Chny/24 3 115BBE of the Act. Aggrieved by the order of the ld. CIT(A), the Revenue is in appeal before the Tribunal. 4. The ld. DR Shri Shiva Srinivas, CIT submits that the assessee has not filed return of income for AY 2017-18 and not filed any reply to the notices issued by the Assessing Officer or furnished any documentary evidence. The ld. DR argued that the ld. CIT(A) failed to call for evidence to establish beyond doubt the creditworthiness of the partners of the assessee firm who financed the purchase of the said immovable property and the assessee failed to prove the veracity of the loans taken by the partners of the assessee firm by failing to furnish necessary documents in support of the same. 5. Having heard the ld. DR, we note that the assessee filed fresh evidence before the ld. CIT(A), considering the same, called for remand report from the Assessing Officer. We note that during the course of remand proceedings the assessee furnished sources for purchase of the property and by incorporating the details of source and transactions of the assessee, the Assessing Officer submitted the remand report, which is reproduced at pages 6 to 8 of the impugned order. The assessee also submitted its rejoinder and the same is Printed from counselvise.com ITA No. 3330/Chny/24 4 reproduced at para 4.3 of the impugned order. We find that after considering the remand report as well as rejoinder filed by the assessee, the ld. CIT(A) has observed that the source of the investment in the immovable property has been duly explained as being from out of the loans from the banks and paid through banking channels as evidenced by the bank statement. 6. The only objection of the Appellant-Revenue is that the assessee failed to furnish ITRs of the partners to establish the genuineness, identity and creditworthiness of the creditor. The ld. CIT(A) has rightly observed that this is not a case of unexplained cash credits or addition under section 68 of the Act, which would require the assessee to establish the genuineness, identity and creditworthiness of the creditor. We find that against the addition made by the Assessing Officer under section 69 of the Act, the assessee is required to furnish source of the investment and in this case, the assessee has established by furnishing source of the investment before the Assessing Officer during remand proceedings, which is out of bank loans availed by the partners of the assessee firm. Thus, we find no infirmity in the order passed by Printed from counselvise.com ITA No. 3330/Chny/24 5 the ld. CIT(A), which is justified. Thus, the grounds raised by the Appellant-Revenue are dismissed. 7. In the result, the appeal filed by the Revenue is dismissed. Order pronounced on 20th August, 2025 at Chennai. Sd/- Sd/- (JAGADISH) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 20.08.2025 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकरआयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF. Printed from counselvise.com "