MAHALAKSHMI RAMASAMY,NAGERCOIL V. INCOME TAX OFFICER, NAGERCOIL

CO 18/CHNY/2025

AI Insights

The case revolves around an appeal by the Income Tax Department against the order of the CIT(A), which had deleted the addition of Rs. 1,38,57,250 as unexplained cash deposits under section 69A of the Income Tax Act. The assessee, Smt. Mahalakshmi Ramasamy, had her income and unexplained cash deposits assessed by the Assessing Officer (AO) under sections 147 and 144, following which she appealed. The CIT(A) accepted the assessee's explanation that the cash deposits were from her commission and business activities as a milk distributor for Hutson Agro Products Ltd. The Tribunal agreed with the CIT(A)'s findings, dismissing the Revenue's appeal and the assessee's cross-objection, which supported the CIT(A)'s order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 39262 (ITAT-CHENNAI)
• Appeal Type: Cross Objection
• Pronouncement Date: 06-02-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R. BHOOPATHI LD.
• Assessee Lawyers: M. SUNDAR LD
• Keywords: Additional evidence; TDS
• Section: 147; 144; 142(1); 44AB

Judgement Text

" आयकर अपीलीय अिधकरण “ए” \u000eा यपीठ चे\u0013ई म\u0016। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, CHENNAI मा ननीय \u0019ी मनोज क ुमा र अ\u001dवा ल ,लेखा सद# एवं मा ननीय \u0019ी मनु क ुमा र िग&र, \u000eा ियक सद# क े सम'। BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM AND HON’BLE SHRI MANU KUMAR GIRI, JM आयकरअपील सं ./ ITA No.2893/Chny/2024 (िनधा (रणवष( / Assessment Year: 2018-19) ITO Ward-1, Nagercoil बनाम/ Vs. Smt. Mahalakshmi Ramasamy 3/3B3, Vathiyarvillai, Nagercoil, Agasteeswaram-629 001. \u0002थायीलेखासं./जीआइआरसं./PAN/GIR No. DJTPM-5698-P (अपीलाथ\u001c/Appellant) : (\u001f थ\u001c / Respondent) & Cross Objection No.18/Chny/2025 (In ITA No.2893/Chny/2024) (िनधा(रण वष( / Assessment Year: 2018-19) Smt. Mahalakshmi Ramasamy 3/3B3, Vathiyarvillai, Nagercoil, Agasteeswaram-629 001. बनाम/ Vs. ITO, Ward-1, Nagercoil. \u0002थायीलेखासं./जीआइआरसं./PAN/GIR No. DJTPM-5698-P (Cross-Objector) : (\u001f थ\u001c / Respondent) अपीलाथ\u001cकीओरसे/ Assessee by : Shri M. Sundar (Advocate) - Ld. AR \u001f थ\u001cकीओरसे/Revenue by : Shri R. Bhoopathi (Addl.CIT) - Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 06-02-2025 घोषणाकीतारीख /Date of Pronouncement : 06-02-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by Revenue for Assessment Year (AY) 2018-19 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 29-08-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 147 r.w.s 144 of the Act on 13-03-2024. The grounds taken by the Revenue read as under:- (1) The Order of the Ld. CIT(A) NFAC, Delhi is opposed to law on the facts and in the circumstances of the case. (2) The Ld. CIT(A) erred in deleting the addition made towards cash deposits of Rs.1,38,57,250/- by treating the same as unexplained money u/s.69A. (3) The Ld. CIT(A) erred in admitting additional evidence, without granting opportunity to the Assessing Officer, in violation of the provisions of Rule 46A of the I.T. Rules, 1962. (4) The Ld. CIT(A) erred in deleting the entire addition of Rs.1,38,57,250/- made u/s.69A without appreciating the fact that the assessee had not filed return of income and explained the source for the cash deposits before the Assessing Officer. (5) The Ld. CIT(A) erred in not appreciating the fact that the assessee had failed to file return of income, tax audit report as required u/s. 44AB of the I.T. Act and failed to respond to the notices issued u/s.148 and 142(1) to prove that cash deposits made was from known source of income and the assessee has no taxable income. The assessee has filed cross-objection which is supportive of impugned order. Having heard rival submissions and upon perusal of case records, our adjudication would be as under. 2. The assessee’s case was reopened pursuant to receipt of information that the assessee deposited cash of Rs.138.57 Lacs in her bank account and also earned commission from M/s Hutson Agro Product Ltd. for Rs.0.31 Lacs. Since the assessee failed to substantiate the source of cash deposits, Ld. AO added both these items u/s 69A. 3. During appellate proceedings, it transpired that the assessee acted as milk distributing agent for Hutson Agro Products Ltd. The modus operandi was that the assessee distributed milk to the customers of Hutson Agro Products Ltd. and collected money from the buyers which was deposited in the current account and transferred to the principal through banking channels. In the process, the assessee earned commission income. In support, the assessee furnished bank statement as well as statement of Hutson Agro Products Ltd. Concurring with assessee’s submissions, Ld. CIT(A) directed Ld. AO to delete the addition of cash deposit of Rs.138.57 Lacs. Aggrieved, the revenue is in further appeal before us. 4. The findings rendered by Ld. CIT(A) are duly evidenced by the copy of bank statement as well as statement of Hutson Agro Products Ltd. as placed on record by Ld. AO. It would appear that the business model of the assessee is to distribute milk for principal against which the assessee would collect cash. The cash so collected would be deposited in the bank account which would be transferred to the principal through banking channels. In the process, the assessee has earned commission income which is reflected by the principal in the TDS statement. All these facts duly support the conclusion of Ld. CIT(A) in the impugned order and therefore, the same could not be faulted with. The power of Ld. CIT(A), as per settled legal position, is co-terminus with that of the power of Ld. AO. Therefore, the ground on violation of Rule 46A could not be accepted considering the facts of the case. The revenue’s appeal stand dismissed. The assessee’s cross-objection are merely supportive in nature. 5. The appeal as well as cross-objection stand dismissed. Order pronounced on 06th February, 2025. Sd/- (MANU KUMAR GIRI) \u000eा ियक सद# / JUDICIAL MEMBER Sd/- (MANOJ KUMAR AGGARWAL) लेखा सद# / ACCOUNTANT MEMBER चे2ई Chennai; िदनांक Dated : 06-02-2025 DS आदेशकीHितिलिपअ\u001dेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u001c/Assessee 2. \u001f थ\u001c/Revenue 3. आयकरआयु;/CIT Madurai. 4. िवभागीय\u001fितिनिध/DR 5. गाड@फाईल/GF "