MOHIDEEN PITCHAI MOHAMED KASIN,SALEM V. ITO WARD I(1), SALEM

ITA 718/CHNY/2025

AI Insights

The case involves an appeal by Mohideen Pitchai Mohamed Kasim against the order of the Commissioner of Income Tax (Appeals), which confirmed the additions made by the Assessing Officer (AO) for the assessment year 2012-13. The AO had added Rs.2,00,000 as unexplained credit under section 68 of the Income Tax Act and disallowed another Rs.2,00,000 for want of expenditure vouchers. The CIT(A) dismissed the appeal due to non-response from the assessee, who later appealed to the Tribunal. The Tribunal found merit in deleting the disallowance of expenditure but sustained the addition of the gift amount due to insufficient evidence.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714310 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRYATI SHARMA
• Assessee Lawyers: T.S. LAKSHMI VENKATARAMAN
• Keywords: Set aside; Reasonable cause; Unexplained cash credit; Gift

Judgement Text

" आयकर अपीलीय अधिकरण, ‘ए’ न्यायपीठ, चेन्नई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI श्री जॉजज जॉजज क े, उपाध्यक्ष एवं श्री एस.आर.रघुनाथा, लेखा सदस्य क े समक्ष BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 718/Chny/2025 धनिाजरण वर्ज / Assessment Year: 2012-13 Mohideen Pitchai Mohamed Kasim, No.20, F.F Road, Salem – 636 001. vs. Income Tax Officer, Ward 1(1), Salem. [PAN:AKOPK-3732-F] (अपीलाथी/Appellant) (प्रत्यथी/Respondent) अपीलाथी की ओर से/Appellant by : Shri. T.S.Lakshmi Venkataraman, FCA. प्रत्यथी की ओर से/Respondent by : Ms. Pryati Sharma, JCIT. सुनवाई की तारीख/Date of Hearing : 04.06.2025 घोर्णा की तारीख/Date of Pronouncement : 05.08.2025 आदेश /O R D E R PER S. R. RAGHUNATHA, AM : This appeal filed by the assessee is directed against the order passed by the learned Commissioner of Income Tax (Appeals) / Addl/JCIT(A)-1, Ahmedabad dated 25.11.2024 and pertains to assessment year 2012-13. 2. At the outset, we find that there is a delay of 38 days in appeal filed by the assessee, for which the assessee has filed an affidavit stating the reasons for delay, wherein it is submitted that Mr.Murali, Tax Practitioner, failed to give proper professional guidance to the assessee. The assessee became aware of appellate order dated 25.11.2024 passed by the ld.CIT(A) only when he received a recovery notice from ITO, Salem. After receiving proper professional guidance from the Chartered Accountant during the first week of March 2025, immediately the appeal was filed on 10.03.2025. Hence, there was a delay in Printed from counselvise.com :-2-: ITA. No:718/Chny/2025 filing the appeal by the assessee. After considering the Affidavit filed by the assessee and also hearing both the parties, we find that there is a reasonable cause for the assessee in not filing appeal on or before the due date prescribed under the law and thus, in the interest of justice, we condone delay in filing of appeal and admit the appeal filed by the assessee for adjudication. 3. The brief facts of the case are that the assessee was engaged in the retail dealer in lubricating oil and scrap business and had filed his return of income for A.Y.2012-13 on 24.05.2013 admitting a total income of Rs.2,02,160/-. The assessee had admitted gross receipts of Rs.99,88,028/-, whereas the AO noticed that the total credits as on 31.03.2011 in the ICICI bank accounts stood at Rs.3,14,77,494/- leaving a difference of Rs.2,14,89,466/-. On perusal of the deposits and omissions of gross receipts, the AO has initiated the proceedings u/s.147 of the Act after obtaining approval of ld.PCIT, Salem and issued notice u/s.148 of the Act dated 25.03.2018 and was served on 28.03.2018. In response to the above notice, the assessee filed a letter on 06.12.2018 stating that he had filed his return of income on 06.12.2018 admitting a total income of Rs.2,76,380/-. Subsequently, the AO was issued notice u/s.143(2) of the Act on 06.12.2018. In response to the above notice, the ld.AR of the assessee was present and filed the details. However, on verification, it was noticed that a sum of Rs.2,00,000/- was credited as a gift from wife in the Capital Account of the assessee for the year ended 31.03.2012. The assessee could not prove the above gift with satisfactory documentary evidence like confirmation letter and assessment details. Under the above circumstances, the AO added the amount of Rs.2,00,000/- as unexplained credit u/s.68 of the Act and passed an order dated 31.12.2018 u/s.143(3) of the Act. Further, on verification of books of accounts submitted by the assessee, the AO disallowed Rs.2,00,000/- for want of expenditure vouchers and made an addition to the total income. 4. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld. CIT(A) / Addl/JCIT(A)-1, Ahmedabad. Printed from counselvise.com :-3-: ITA. No:718/Chny/2025 5. At the outset, we observed that the ld.CIT(A) has provided five opportunities for the assessee to appear for hearings as detailed in paragraph 6 of the ld.CIT(A) order to support the appeal of the assessee. However, the assessee chose to be silent and did not respond to any of the notices and hence, the ld. CIT(A), Ahmedabad dismissed the assessee’s appeal by confirming the order of the AO dated 25.11.2024. Aggrieved by the order of ld.CIT(A) the assessee is in appeal before us. 6. The ld.AR prayed submitted that the assessee submitted complete books of accounts before the AO, but AO has disallowed the expenditure without any basis to the tune of Rs.2.00 Lakhs. The remaining amount of Rs.2.00 Lakhs has been received from wife as a gift, which is not taxable u/s.56 of the Act and hence prayed for deleting both the additions made by the AO. Alternatively, since, the assessee had not participated before the ld.CIT(A) in appellate proceedings, the ld.AR prayed for providing one more opportunity before the CIT(A). Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the AO to complete the assessment proceedings effectively. 7. Per contra, the ld.DR submitted that the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A). 8. We have heard from the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the AO has passed an order by considering the books of accounts and accepted the additional turnover of scrap to the tune of Rs.2,61,26,513/- but denied the expenditure to the tune of Rs.2.00 lakhs for the reason of no vouchers were produced by the assessee. Apart from that the AO has made an addition of Rs.2.00 Lakhs gift received from his wife, which has been credited to capital account, since the assessee has not produced any documentary evidence. Printed from counselvise.com :-4-: ITA. No:718/Chny/2025 9. In the present facts and circumstances of the case and to end the litigation and also to meet the ends of justice and fair play we set aside the order of ld.CIT(A). We note that the disallowance of an expenditure of Rs.2.00 lakhs has been made by the AO on adhoc basis for want of vouchers. However, we find that the AO has already accepted the entire turnover of Rs.2.61 crores without rejecting the books of accounts of the assessee. In view of the above we are inclined to delete the disallowance of expenditure to the tune of Rs.2.00 Lakhs. However, we are inclined to sustain the other addition of gift received by the assessee of Rs.2.00 Lakhs, since the assessee has not produced any evidence in support of the same. 10. In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the court on 05th August, 2025 at Chennai. Sd/- Sd/- (जॉजज जॉजज क े) (GEORGE GEORGE K) उपाध्यक्ष /VICE PRESIDENT (एस. आर. रघुनाथा) (S. R. RAGHUNATHA) लेखा सदस्य/ACCOUNTANT MEMBER चेन्नई/Chennai, धदनांक/Dated, the 05th August, 2025 jk आदेश की प्रधतधलधप अग्रेधर्त/Copy to: 1. अपीलाथी/Appellant 2. प्रत्यथी/Respondent 3.आयकर आयुक्त/CIT– Chennai/Coimbatore/Madurai/Salem 4. धवभागीय प्रधतधनधि/DR 5. गार्ज फाईल/GF Printed from counselvise.com "