MARAPPAN LAKSHMANAN,ERODE V. ITO, WARD-2(1), ERODE

ITA 3347/CHNY/2024

AI Insights

The case involves Marappan Lakshmanan, who appealed against the order of the CIT(A) confirming an addition of \\u20b92,98,901 to his income for the assessment year 2017-18. This addition was initially made by the Assessing Officer under section 69A of the Income Tax Act, 1961, citing unexplained cash credits. The CIT(A) had reduced the addition from \\u20b97,98,901 to \\u20b92,98,901, acknowledging some business receipts but still treating a significant portion as unexplained. The Tribunal dismissed the appeal, agreeing with the CIT(A)'s findings and noting the absence of evidence to substantiate the assessee's claims of cash balance.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107407 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A. SASIKUMAR
• Assessee Lawyers: S. SRIDHAR; ERODE
• Keywords: Business income; Unexplained cash credit
• Section: 143(3); 69A

Judgement Text

"आयकर अपीलीय अिधकरण, ’डी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘D’ 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 अपील सं./I.T.A. No.3347/Chny/2024 िनधाŊरण वषŊ/Assessment Year: 2017-18 Marappan Lakshmanan, 43, Olapalayam B.O., Perundurai, Erode 638 052. [PAN:AFHPL5944A] Vs. The Income Tax Officer, Ward 2(1), Erode. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri S. Sridhar, Advocate (Erode) ŮȑथŎ की ओर से/Respondent by : Shri A. Sasikumar, CIT सुनवाई की तारीख/ Date of hearing : 24.02.2025 घोषणा की तारीख /Date of Pronouncement : 28.02.2025 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order dated 12.11.2024 passed by the Addl/JCIT(A)-9, Mumbai for the assessment year 2017-18. 2. The assessee raised 4 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the addition made by the Assessing Officer under section 69A of the Income Tax Act, 1961 [“Act” in short] in the facts and circumstances of the case. I.T.A. No.3347/Chny/24 2 3. Brief facts of the case are that the assessee is an individual, filed his return of income admitting total income of ₹.3,45,990/-. The case of the assessee was selected for scrutiny under CASS and issued statutory notices. On verification of the details furnished by the assessee including bank statement and written submissions, the Assessing Officer concluded the assessment under section 143(3) of the Act dated 24.12.2019 by making addition of ₹.7,98,901/- [₹.2,67,000 + 5,31,000] towards unexplained cash credit under section 69A of the Act and undisclosed business income of ₹.1,79,000/-. On appeal, the first appellate authority allowed relief to the extent of ₹.5,00,000/- against the additions made under section 69A of the Act while confirming the addition made towards undisclosed business income of ₹.1,79,900/-, against which the assessee preferred further appeal before the Tribunal. 4. The ld. AR Shri S. Sridhar, Advocate submits that the Assessing Officer made addition of ₹.2,67,000/- and also ₹.5,31,000/- under section 69A of the Act by holding no evidence produced showing cash balance. The ld. CIT(A) granted relief to an extent of ₹.5,00,000/- and confirmed ₹.2,98,000/- [₹.7,98,000 – 5,00,000]. The ld. AR pleaded to treat the said addition confirmed by the ld. CIT(A) has business receipt forming part of I.T.A. No.3347/Chny/24 3 cash balance and requested to adopt the rate of profit at 8.28% as adopted by the Assessing Officer. 5. The ld. DR Shri A. Sasikumar, CIT supported the orders of authorities below. 6. Heard both the parties and perused the material available on record. In this case, we note that the Assessing Officer assessed the business income at ₹.5,25,890/-. Again, an amount of ₹.7,98,901/- was assessed under income from other sources, thereby, the total income is determined by the Assessing Officer at ₹.13,23,890/-. The first appellate authority vide his order had given relief of ₹.5,00,000/- and confirmed the balance addition of ₹.2,98,901/- [₹.7,98,901-5,00,000]. The ld. AR pleaded that the Assessing Officer made addition of ₹.7,98,901/- only on the ground of said cash deposit was made during demonetization period and accordingly not considered the same as business income. The ld. AR submits that the said cash deposit also out of business receipt and may be considered as business income and accordingly agreed for tax rate at 8.28% for the same. On perusal of the impugned order and also the assessment order, we note that no evidence was produced showing the cash balance, but, however, the ld. CIT(A), considering the business activities of the assessee, had given relief of ₹.5,00,000/-. Before us, no I.T.A. No.3347/Chny/24 4 evidence is furnished in support of the assessee’s contention that there is cash balance. In view of the same, having no proof showing cash balance, in our opinion, the order of the ld. CIT(A) is justified in restricting the addition to an extent of ₹.2,98,901/-. Thus, we find no infirmity in the order of the ld. CIT(A) and the grounds raised by the assessee are dismissed. 7. In the result, the appeal filed by the assessee is dismissed. Order pronounced on 28th February, 2025 at Chennai. Sd/- Sd/- (JAGADISH) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 28.02.2025 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF. "