MUTHU KRISHNAN,THENI V. ITO, WARD-1, THENI

ITA 2638/CHNY/2024

AI Insights

The case involves Muthu Krishnan, an individual engaged in the coconut business, who appealed against the addition of Rs. 8,00,000 to his income for the Assessment Year 2018-19, which was confirmed by the CIT(A). The addition was initially made by the Assessing Officer (AO) under Section 69 of the Income-tax Act, 1961, due to the unexplained cash payment of Rs. 9,00,000 for a property purchase. The assessee argued that the cash was from savings over six years, including contributions from his wife and parents. The ITAT found partial merit in the assessee's explanation, accepting Rs. 4,50,000 as business savings but requiring further evidence for the rest.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107541 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2018-2019
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R. ANITHA
• Assessee Lawyers: R. THULASI RAM; KUMARASUBRAMANIAN
• Keywords: Business income
• Section: 147; 148; 144; 69

Judgement Text

"आयकर अपीलीय अिधकरण, ’सी’ \u0010ा यपीठ, चे\u0015ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI \u0018ी यस यस िव\u001aने\u001c रिव, \u0010ा ियक सद\u001e एवं \u0018ी जगदीश, लेखा सद\u001e क े सम& BEFORE SHRI SS VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.2638/Chny/2024 िनधा 8रण वष8 /Assessment Year: 2018-19 Muthu Krishnan, 30, Vishvanathan Street, Cumbum, Uthamapalayam, Theni – 625 516. Vs. The Income Tax Officer, Ward-1, Theni. [PAN: COBPM 4473C] (अपीलाथ\u0007/Appellant) (\b\tयथ\u0007/Respondent) अपीला थF की ओर से/ Appellant by : Shri R. Thulasiram, Advocate & Shri Kumara Subramanian, Advocate HIथF की ओर से /Respondent by : Ms. R. Anitha, Addl. CIT सुनवा ई की ता रीख/Date of Hearing : 28.01.2025 घोषणा की ता रीख /Date of Pronouncement : 14.03.2025 आदेश / O R D E R PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2018-19 arises out of the order of Learned Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi [hereinafter “CIT(A)”] dated 08.08.2024 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 147 r.w.s 144 r.w.s 144B of the Income-tax Act, 1961 (hereinafter “the Act”) on 26.03.2023. ITA No.2638/Chny/2024 :- 2 -: 2. There is a delay of 09 days in filing the appeal by the assessee. The assessee has filed condonation petition/ stating the reasons for delay in filing the appeal. We have considered the petition/affidavit of delay in filing the appeal and satisfied that there was sufficient cause for not filing the appeal within the prescribed time limit. Hence, the delay is hereby condoned. 3. The only ground of appeal in this appeal of assessee is against confirming the addition of Rs.8,00,000/- in respect of purchase of immovable property in cash. 4. The assessee is an individual engaged in the business of buying and selling of Coconut. The assessee has purchased a property for a sum of Rs. 11,00,000/- on 27.10.2017 and has paid an advance of Rs. 9,00,000/- in cash . Assessee has not filled return of income, therefore the A.O. reopened assessment by issuing notice u/s 148. In response to notice u/s. 148 of the Act, the assessee filed return of income by admitting total income of Rs. 2,99,560/-. The assessee , during assessment proceeding has explained the source of cash for making advance as a saving from business for past six years. However, the A.O did not accept the assessee’s explanation and made addition of Rs. 9 Lakhs u/s. 69 of the Act. The assessee before ITA No.2638/Chny/2024 :- 3 -: the Ld. CIT(A) has explained the source of advance of Rs. 9,00,000/- as past savings, salary from his wife and money given by the parents. The Ld. CIT(A) accepted the explanation to the extent of Rs. 1,00,000/- and confirmed addition of Rs. 8,00,000/- Lakhs. 5. The Ld. Authorized Representative (A.R) of the assessee before us has submitted income tax computation from 2011-12 to 2017-18 and cash flow statement explaining the source of cash from his business income and amounts given by wife and parents. The assessee has submitted his net income from buying and selling of coconut as under: S.No. Previous year Assessment Year Net Income (Profit) as per profit and loss a/c. 1 2011-12 2012-13 1,47,000 2 2012-13 2013-14 1,73,000 3 2013-14 2014-15 1,71,000 4 2014-15 2015-16 2,19,000 5 2015-16 2016-17 1,95,000 6 2016-17 2017-18 2,07,000 7 2017-18 2018-19 2,99,560 6. As regard to source of cash deposit, the assessee has shown loans from his wife and parents. 7. The Ld. Departmental Representative (DR), on the other hand, has relied on the orders of lower authorities and argued that assessee has not submitted any documentary evidence to support his claim. ITA No.2638/Chny/2024 :- 4 -: 8. We have heard the rival submissions, and perused the materials available on record. The assessee has explained source of cash of Rs. 9,00,000/- to purchase the immovable property from his Coconut business and loan from wife and parents. We find that the assessee has been non filler of return of income and therefore, his explanation cannot be accepted in full. However, considering the fact that the assessee has been running business of buying and selling coconuts for long time, cash saving to the extent of Rs.4,50,000/- can be accepted. As of Ld AR’s submission about sum received from wife and parents, assessee has not been able to submit any evidence in support of the claim therefore, the same cannot be accepted. We accordingly sustain the addition to the extent of Rs 4,50,000 as against Rs 8,00,000 confirmed by the Ld CIT(A). In light of the above, the appeal filed the assessee is partly allowed. 9. In the result, the appeal filed the assessee is partly allowed. Order pronounced on 14th March, 2025. Sd/- Sd/- (यस यस िव\u001aने\u001c रिव) (SS Viswanethra Ravi) \u0001याियक \u0001याियक \u0001याियक \u0001याियक सद\bय सद\bय सद\bय सद\bय / Judicial Member (जगदीश) (Jagadish) लेखा लेखा लेखा लेखा सद\u0011य सद\u0011य सद\u0011य सद\u0011य /Accountant Member चे\u0013नई/Chennai, \u0016दनांक/Dated: 14th March, 2025. EDN/- ITA No.2638/Chny/2024 :- 5 -: आदेश क\u0019 \bितिल\u001cप अ\u001dे\u001cषत/Copy to: 1. अपीलाथ\u0007/Appellant 2. \b\tथ\u0007/Respondent 3. आयकर आयु\u000f/CIT, Madurai 4. िवभागीय \bितिनिध/DR 5. गाड\u0018 फाईल/GF "