MARAPPAGOUNDER CHANDRASEKARAN,TIRUPUR V. ITO, NON CORPORATE WARD 4(1), COIMBATORE, COIMBATORE

ITA 2932/CHNY/2024

AI Insights

The case involves appeals by Marappa Gounder Chandrasekaran against the orders of the Commissioner of Income Tax (Appeals) in Delhi, which confirmed additions made by the AO regarding unexplained cash deposits and discrepancies in reported turnover for the Assessment Year 2017-2018. The Tribunal examined the submissions and evidence presented, including the business history and financial documents, and found that the AO's additions were not substantiated as the sales and turnover were accepted as correct by the AO himself. Consequently, the Tribunal deleted the additions and the related penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 39310 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P. VIJAIDEEPAN; IRS
• Assessee Lawyers: S. BHUPENDRAN
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

" आयकर अपीलीय अिधकरण ‘ए’’’ Ɋायपीठ चेɄई मŐ। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI माननीय ŵी मनु क ुमार िगįर, Ɋाियक सद˟ एवं माननीय ŵी जगदीश, लेखा सद˟ क े समƗ। BEFORE HON’BLE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND HON’BLE SHRI JAGADISH, ACCOUNTANT MEMBER आयकरअपील सं./ ITA Nos.2931 & 2932/Chny/2024 (िनधाŊरणवषŊ / Assessment Years: 2017-2018 & 2017-2018) Marappa Gounder Chandrasekaran, No.17, Karugampalayam, Mariamman Kovil Street, Ichipatti P.O. Somanur, Tirupur 641 668. [PAN: APHPC 7318B] Vs. The Income Tax Officer, Non Corporate Ward 4(1) Coimbatore (अपीलाथȸ/Appellant) (Ĥ×यथȸ/Respondent) अपीलाथȸ कȧ ओर से/ Appellant by : Shri. S. Bhupendran, Advocate (Virtual) Ĥ×यथȸ कȧ ओर से /Respondent by : Shri. P. Vijaideepan, IRS, JCIT. सुनवाई कȧ तारȣख/Date of Hearing : 13.02.2025 घोषणा कȧ तारȣख /Date of Pronouncement : 14.03.2025 आदेश / O R D E R MANU KUMAR GIRI (Judicial Member) The captioned appeals filed by the assessee are directed against the orders of the Ld. Commissioner of Income Tax (Appeals)(NFAC) Delhi [CIT(A)] dated 30.08.2024 and 24.09.2024 for Assessment Year 2017-2018. 2. The registry has noted delay of 19 days in filing the appeal. Considering the reasons stated in the affidavit by the Assessee, we condone the delay and treat the reasons as ‘sufficient cause’ and admit the appeal for adjudication. 2 ITA Nos.2931 & 32/Chny/2024. 3. Brief facts of the Appeal No.2931/Chny/2024 are as under: The assessee is engaged in the trading of textile items and has filed the return of income for AY 2017-18 on 30.10.2017 admitting a net total income of Rs.4,38,270/- Subsequently, the case was selected for scrutiny through CASS for the reason of ‘cash deposit during the year’. The AO made an addition of Rs.4,47,07,222/- to the total income of the assessee on the following grounds: (a) The difference between the reported turnover of Rs.4,47,07,222/- and the total of bank deposits Rs.5,65,51,427/- being Rs.1,18,44,205/- as sales and computed income @1.24% thereon at Rs.1,47,617/-; (b) Cash deposits of Rs.19,20,000/- made during demonetisation period as unexplained credits u/s 68 of the Act. The assessee challenged the order of the AO before the ld. CIT(A). The ld. CIT(A) confirmed the addition of Rs.19,20,000/- as unexplained credits u/s 68of the Act. Aggrieved assessee is in appeal before us. 4. The ld. counsel for the assessee submitted the difference in amount are due to deposit of cash in hand into the bank account, advances received from the customers and inter-bank fund transfers. The AO treated transaction on these account as turnover. The ld. counsel taken us through the chart showing consistency in business in preceding years and subsequent years. 5. Per contra, the ld. DR, vehemently supported the impugned order of the ld. CIT(A) and prayed for the dismissal of the appeal of the assessee. He further contended that despite having ample opportunities before the ld. CIT(A), the assessee did not furnish anything in support of the contentions made before the Tribunal. 3 ITA Nos.2931 & 32/Chny/2024. 6. We have heard the both parties and perused the orders of the lower authorities and also perused case laws, the chart showing history of business, trading and profit & loss account for the year ended 31.03.2017 and Balance Sheet as on 31.03.2017. We find that the AO has not disputed the sales and accepted the sale proceeds. He also accepted the turnover and income tax return filed as true and correct. The ld. AO has also considered the entire bank receipts as turnover. Therefore, not accepting the consideration received on the said sale as genuine is itself contradictory. We are also conscious of the fact that there are deposit of cash in hand into the bank account, advances received from the customers and inter- bank fund transfers which has not been disputed by the ld.CIT(A). Therefore, we accept the explanation of the assessee and delete the both additions. 7. Now ITA No.2932/Chny/2024: While adjudicating the quantum assessment referred supra, the AO initiated penalty proceedings u/s 271AAC of the Act. Since, we have deleted the additions hence, consequently this penalty levied u/s 271AAC is also deleted. 8. In result, both the appeals of the assessee are allowed. Order pronounced in open court on 14th day of March, 2025 at Chennai. Sd/- Sd/- (जगदीश) (JAGADISH) लेखा सद˟ / ACCOUNTANT MEMBER (मनु क ुमार िगįर) (MANU KUMAR GIRI) Ɋाियक सद˟ / JUDICIAL MEMBER चेɄई Chennai: िदनांक Dated :14-03-2025 KV आदेश कȧ ĤǓतͧलͪप अĒेͪषत /Copy to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT, Coimbatore. 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF "