KUPPUSAMY BARATHAN,COIMBATORE V. DCIT, NCC-4, COIMBATORE

ITA 249/CHNY/2025

AI Insights

The case involves Kuppusamy Barathan, an individual engaged in manufacturing and selling power loom control panels, who appealed against the order of the Commissioner of Income Tax, National Faceless Appeal Centre, Delhi. The appeal pertained to the assessment year 2017-18, concerning an addition made by the Assessing Officer under section 143(3) of the Income-tax Act, 1961, due to unexplained cash deposits during the demonetization period amounting to Rs. 2,97,04,000. The assessee argued that these deposits were from subsidy sales and advances from customers, predominantly in cash, which were recorded in the books. However, the Assessing Officer and the CIT(A) found insufficient evidence linking the cash deposits to the advances received, leading to the addition. The Tribunal, after considering the submissions and materials provided, decided to remit the matter back to the Assessing Officer for a detailed examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472160 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R. ANITHA
• Assessee Lawyers: T. BANUSEKAR
• Section: 143(3)

Judgement Text

" आयकर अपीलीय अिधकरण, ‘सी’ \u0011ा यपीठ, चे\u0016ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI \u0019ी एबी टी. वक , \u0011ा ियक सद! एवं \u0019ी जगदीश, लेखा सद! क े सम( BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.249/Chny/2025 िनधा9रण वष9 /Assessment Year: 2017-18 Kuppusamy Barathan, 93, Manickavasagar Building, NH-47, Karumatampatti, Sulur, Coimbatore-641 659. Vs. The Dy. Commissioner of Income Tax, Non Corporate Ward-4, Coimbatore. [PAN: AKCPB 9582E] (अपीलाथ\u0007/Appellant) (\b यथ\u0007/Respondent) अपीलाथ की ओर से/ Appellant by : Shri T. Banusekar, Advocate IJथ की ओर से /Respondent by : Ms. R. Anitha, Addl. CIT सुनवाई की तारीख/Date of Hearing : 19.03.2025 घोषणा की तारीख /Date of Pronouncement : 26.03.2025 आदेश / O R D E R PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2017-18 arises out of the order of Learned Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi [hereinafter “CIT(A)”] dated 28.11.2024 in the matter of assessment framed by the Assessing Officer [AO] u/s. 143(3) of the Income-tax Act,1961 (hereinafter “the Act”) on 31.12.2019. ITA No.249/Chny/2025 :- 2 -: 2. The assessee is an individual, engaged in the business of manufacturing and selling power loom control panels and accessories. The assessee is a registered manufacturer and is eligible to supply the upgradation kits to the ordinary powerloom units under the Modified in- situ upgradation Scheme. The assessee has made cash deposit of Rs. 2,97,04,000/- during demonization period. The assessee has explained the cash deposit out of subsidy sales and duly recorded in books of account. The assessee has explained that he has an outstanding balance of Rs. 15,54,97,316/- in the advance from customers account as on 01.04.2016 and has received advance of Rs. 24,88,00,861/- from various customers during the year under consideration. The assessee further submitted that most of the customers are from rural areas, and used to pay advance money predominantly by way of cash. The A.O has made the addition as the assessee has not furnished any reconciliation of the subsidized sales and the subsidy receivable with the amount appearing against advance received in the balance sheet. On appeal, the Ld. CIT(A) confirmed the addition on the ground that the assessee has not submitted any evidence of nexus between the cash deposit and the advance received from the customers. ITA No.249/Chny/2025 :- 3 -: 3. The Ld. Authorized Representative (A.R) of the assessee before us has submitted that the details of customer list, from whom the advance was received. The assessee has explained that the cash deposited was advance collected before demonetization period and duly recorded in the books of account. 4. On the other hand, the Ld. Departmental Representative (DR), has relied on the orders of lower authorities. 5. We have heard the rival submissions, and perused the materials available on record. The A.O has made addition as the assessee has not submitted the reconciliation of the subsidized sales and the subsidy receivable with the amount appearing against the advance received as reflected in the balance sheet. The Ld CIT(A) has also confirmed the addition without considering the books of account and explanation of assessee. The assessee in the paper book has provided the details of customers from whom cash advance were received and its accounting in books of account. In light of the above, we deem it appropriate to remit the matter back to the file of A.O for denovo adjudication, after giving reasonable opportunity to the assessee to present his case. We also direct the assessee to appear ITA No.249/Chny/2025 :- 4 -: before the A.O on the date of hearing without fail and furnish complete details for fresh consideration. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 26th March, 2025. Sd/- Sd/- (एबी टी. वक ) (ABY. T. Varkey) \u0011ाियक सद! / Judicial Member (जगदीश) (Jagadish) लेखा सद! /Accountant Member चे\u0010नई/Chennai, \u0013दनांक/Dated: 26th March, 2025. EDN/- आदेश क\u0016 \bितिल\u0019प अ\u001aे\u0019षत/Copy to: 1. अपीलाथ\b/Appellant 2. थ\b/Respondent 3. आयकर आयु\u0010/CIT, Coimbatore 4. िवभागीय ितिनिध/DR 5. गाड\u0019 फाईल/GF "