NAINAR MOHAMED ABUNU MUJAHEER,NAGAPATTINAM V. ITO, WARD-1, NAGAPATTINAM

ITA 1084/CHNY/2025

AI Insights

The case involves an appeal by Nainar Mohamed Abunumujaheer against the order of the Commissioner of Income Tax (Appeals) for the assessment year 2017-18. The primary issues in the appeal were the additions made to the assessee's income: Rs.1,34,786 for unverified business expenses and Rs.13,93,000 for unexplained cash deposits during the demonetization period. The assessee argued that the additions were arbitrary and not substantiated by adequate evidence. The Tribunal found merit in the assessee's arguments regarding the cash deposits, noting the availability of sufficient cash prior to demonetization, and thus removed that addition. However, it upheld the addition related to unverified expenses.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 652629 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANITHA
• Assessee Lawyers: Y. SRIDHAR; F.C.A

Judgement Text

"आयकर अपीलीय अधिकरण, ’सी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI माननीय श्री मनु क ुमार धिरर ,न्याधयक सदस्य एवं माननीय श्री अमिताभ शुक्ला, लेखा सदस्य क े सिक्ष BEFORE HON’BLE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND HON’BLE SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.1084/Chny/2025 Assessment Years: 2017-18 Nainar Mohamed Abunumujaheer, No.21, Sir Ahamaed Street, Nagapattinam, Tamil Nadu-611 001. [PAN: AHSPA3927H] Income Tax Officer, Ward-1, Nagapattinam. (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Shri Y.Sridhar,F.C.A, प्रत्यर्थी की ओर से /Revenue by : Ms.Anitha, Addl.CIT सुनवाई की तारीख/Date of Hearing : 17.06.2025 घोषणा की तारीख /Date of Pronouncement : 19.06.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M : This appeal is filed by the assessee against the order bearing DIN & Order No.ITBA / APL / S / 250 / 2024-25 / 1074694011(1) dated 19.03.2025 of the Learned Commissioner of Income Tax [herein after “CIT(A), for the assessment year 2017-18. The reference to the word “Act” in this order hereinafter shall mean the Income Tax Act, 1961 as amended from time to time. 2.0 At the outset, the Ld.Counsel for the assessee submitted that the Ld.CIT(A) has dismissed its appeal without affording due opportunity of being hard. It was stated that the addition of Rs.1,34,786/- on account ITA No.1084/Chny/2025 Page - 2 - of 3 of unverified expenses and of Rs.13,93,000/- on account of unexplained cash deposits during the demonetization period was made to the returned income. The Ld.Counsel argued that the Ld.CIT(A) had issued statutory notices but the same could not be complied on account of compelling personal constraints. It is the case of the appellant assessee that the disallowance of business expense is purely imaginary and arbitrary. On the issue of cash deposits, the assessee has argued that the Ld.AO in para 5 of his order himself concluded that the assessee was having sufficient cash balance in its books on the day before announcement of demonetization and therefore the addition per se and its confirmation is erroneous and excessive. 3.0 Per contra, the Ld.DR relied upon the order of lower authorities. 4.0 We have heard rival submissions in the light of material available on records. We have noted from para 5 of the order of the Ld.AO as under: “….it is noticed that the sufficient cash balance was available in the assessee’s cash book on the day before the announcement of demonetization. However, considering the assessee’s reply, the time for deposit of specified bank notes in their bank account is considered for ten days i.e upto 21.11.2019….” The observations of the Ld.AO clearly allude that he was fully convinced of the cash balances in assessee’s book on the day before announcement of demonetization and therefore the addition per se was ITA No.1084/Chny/2025 Page - 3 - of 3 unwarranted. The Ld.CIT(A) could not appreciate this aspect as he chose to dismiss the appeal in limine. Accordingly, we are of the considered that no case of any valid addition is made out in the case of the assessee. The Ld.AO is directed to delete the impugned addition of Rs.13,93,000/-. Accordingly, the same is confirmed and the ground of appeal raised on this issue is allowed. 5.0 As regards the addition of Rs.1,34,786/- on account of unverified expenses, we have noted that the estimation of 10% made by the Ld.AO is fair and reasonable in view of the facts of the case. Accordingly, the same is confirmed and the ground of appeal raised on this issue is dismissed. 8.0 In the result, the appeal of the assessee is partly allowed. Order pronounced on 19th , June-2025 at Chennai. Sd/- (मनु क ुमार धिरर) (MANU KUMAR GIRI) न्याधयक सदस्य / Judicial Member Sd/- (अधमताभ शुक्ला) (AMITABH SHUKLA) लेखा सदस्य /Accountant Member चेन्नई/Chennai, धदनांक/Dated: 19th , June-2025. KB/- आदेश की प्रतितिति अग्रेतिि/Copy to: 1. अिीिार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT - 4. तिभागीय प्रतितिति/DR 5. गार्ड फाईि/GF "