KANDASAMY RASU,NAMAKKAL V. ITO, WARD-2, NAMAKKAL

ITA 2311/CHNY/2024

AI Insights

The case involves Kandasamy Rasu, an individual engaged in the business of buying and selling eggs, who appealed against the order of the Learned Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi. The appeal arose from an assessment order passed by the Assessing Officer under sections 144 and 147 of the Income-tax Act, 1961, which added a total credit of Rs. 44,60,130, including cash deposits of Rs. 36,01,670, to the assessee's income for the Assessment Year 2011-12. The assessee contended that the cash deposits were from receipts of sundry debtors and cash withdrawn from his bank account, supported by a bank statement. However, the CIT(A) did not accept this explanation, leading to the appeal before the ITAT.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107190 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C. MURUGESAN
• Assessee Lawyers: G. AKASH
• Keywords: Peak credit
• Section: 147; 144; 69A

Judgement Text

"आयकर अपीलीय अिधकरण, ‘बी’ \u0011ा यपीठ, चे\u0016ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI \u0019ी यस यस िव\u001cने\u001e रिव, \u0011ा ियक सद एवं \u0019ी जगदीश, लेखा सद क े सम( BEFORE SHRI SS VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.2311/Chny/2024 िनधा 9रण वष9 /Assessment Year: 2011-12 Kandasamy Rasu, 7/133, Elur Road, Chinna Kalangani, Kalangani (Post), Namakkal – 637 014. Vs. The Income Tax Officer, Ward-2, Namakkal. [PAN: AFVPR 0671J] (अपीलाथ\u0007/Appellant) (\b\tयथ\u0007/Respondent) अपीला थE की ओर से/ Appellant by : Shri G.Akash, Advocate GHथE की ओर से /Respondent by : Shri C.Murugesan, Addl. CIT सुनवा ई की ता रीख/Date of Hearing : 06.02.2025 घोषणा की ता रीख /Date of Pronouncement : 12.03.2025 आदेश / O R D E R PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2011-12 arises out of the order of Learned Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi [hereinafter “CIT(A)”] dated 09.07.2024 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 144 r.w.s 147 of the Income- tax Act, 1961 (hereinafter “the Act”) on 28.11.2018. ITA No.2311/Chny/2019 :- 2 -: 2. The effective ground of appeal in this appeal of assessee is against in confirming addition of credit of Rs. 44,60,130/- in the bank account u/s. 69A of the Act. 3. The assessee is an individual and engaged in the business of sale and purchase of eggs. The assessee has deposited cash of Rs.36,01,670/- in his saving bank account, but has not filed return of income. The A.O therefore, has reopened the assessment and made the addition of issued the total credit of Rs. 44,60,130/- including the cash deposits of Rs. 36,01,670/- u/s. 69A of the Act in the ex-parte order passed u/s. 144 r.w.s 147 of the Act. The assessee before the Ld. CIT(A) has submitted that he has engaged in the business of sale and purchase of eggs and the cash deposits were out of receipt from sundry debtors and cash withdrawn from his bank account. The assessee has also submitted a copy of bank statement in support of its contention. However, the Ld. CIT(A) did not accept the assessee’s explanation stating that there is only ATM cash withdrawal and the assessee has not submitted evidence in support of his claim that cash deposited were sourced from sundry debtor. ITA No.2311/Chny/2019 :- 3 -: 4. The Ld. Authorized Representative (A.R) of the assessee has argued that the Ld. CIT(A) has not accepted the source of cash deposit from the ATM withdrawal though the withdrawal were available with the assessee for deposit in the bank account. The Ld. AR has also submitted that the deposits were proceeds from sales and in any case the peak credits balance which could have been added was only Rs. 4,05,667/-. 5. The Ld. Departmental Representative (DR), on the other hand, has relied on the orders of lower authorities. 6. We have heard the rival submissions, and perused the materials available on record. The assessee is engaged in the business of sale and purchase of eggs and has explained the source of cash deposit, as ATM cash withdrawals and proceeds from sales. The Ld. CIT(A) has not accepted the explanation regarding ATM cash withdrawals, without providing any specific reasons. We note that the assessee is engaged in the trading of eggs and has not maintained any books of accounts. After considering the facts of the case, we are of the opinion that the assessee’s income should be estimated @ 12% of the deposit of Rs.44,60,130/-in the bank statement. Accordingly, the income is ITA No.2311/Chny/2019 :- 4 -: confirmed to the extent of Rs.5,35,215/-. And balance addition is deleted. In view of the above, the appeal filed by the assessee is partly allowed. 7. In the result, the appeal filed by the assessee is partly allowed. Order pronounced on 12th March, 2025. Sd/- Sd/- (यस यस िव\u001cने\u001e रिव) (SS Viswanethra Ravi) \u0001याियक \u0001याियक \u0001याियक \u0001याियक सद\bय सद\bय सद\bय सद\bय / Judicial Member (जगदीश) (Jagadish) लेखा लेखा लेखा लेखा सद\u0011य सद\u0011य सद\u0011य सद\u0011य /Accountant Member चे\u0013नई/Chennai, \u0016दनांक/Dated: 12th March, 2025. EDN/- आदेश क\u0019 \bितिल\u001cप अ\u001dे\u001cषत/Copy to: 1. अपीलाथ\u0007/Appellant 2. \b\tथ\u0007/Respondent 3. आयकर आयु\u000f/CIT, Salem 4. िवभागीय \bितिनिध/DR 5. गाड\u0018 फाईल/GF "