P.VENKATESH,NAMAKKAL V. ITD, WARD 1, TIRUCHENGODE, TIRCHUNGODE

ITA 2433/CHNY/2024

AI Insights

The case involves appeals by the assessee, P. Venkatesh, against the orders of the Income Tax Officer for the assessment years 2011-12 and 2012-13, which involved additions made on account of unexplained deposits in the assessee's bank accounts. The Tribunal noted delays in filing the appeals due to the assessee's medical issues and the counsel's location in a different city, which it condoned. The Tribunal found that the lower authorities had not adequately considered the business activities of the assessee, who was engaged in real estate, and had not provided satisfactory reasons for the additions made. Consequently, the Tribunal directed a reduction in the addition made to the assessee's income.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 40111 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R.ANITA
• Assessee Lawyers: T.S. LAKSHMI VENKATRAMAN; F
• Keywords: Set aside
• Section: 250; 13

Judgement Text

" Page - 1 - of 6 आयकर अपीलीय अधिकरण, ’सी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C BENCH: CHENNAI श्री यस यस विश्वनेत्र रवि, न्यावयक सदस्य एवं श्री अविताभ शुक्ला, लेखा सदस्य क े समक्ष BEFORE SHRI SS VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.2432/Chny/2024, निर्ाारण वर्ा /Assessment Years: 2011-12 आयकर अपील सं./ITA No.2433/Chny/2024, निर्ाारण वर्ा /Assessment Years: 2012-13 P.Venkatesh No.5, Street No.6, Kumaresapuram, Tiruchengode Taluk, Namakkal, Tamil Nadu-637211 [PAN: ADJPV1236F] The Income Tax Officer, Ward-1, Tiruchengode (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Shri T.S. Lakshmi Venkatraman, F.C.A. प्रत्यर्थी की ओर से /Revenue by Ms. R.Anita, Addl.CIT सुिवाई की तारीख/Date of Hearing : 21.11.2024 घोर्णा की तारीख /Date of Pronouncement : 10.01.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M : The following appeals have been filed by the assessee contesting the order of Ld.First Appellate Authority as per details below. S. No. Appeal Nos. AYs Appel-lant CIT(A) Order Details Respondent A B C D E F 1 ITA No. 2432/ Chny / 2024 2011- 12 P.Venkatesh No.5, Street No.6, Kumaresapuram, Tiruchengode Taluk, Namakkal, Tamil Nadu-637211 [PAN: ADJPV1236F] DIN & Order No.ITBA / NFAC / S / 250 / 2023-24 / 1061509089(1) dated 26.02.2024 The Income Tax Officer, Ward-1, Tiruchengode 2 ITA No. 2433/ Chny / 2024 2012- 13 DIN & Order No.ITBA / NFAC / S / 250 / 2023-24 / 1061102135(1) dated 26.02.2024 ITA No.2432 & 2433/Chny/2024 :- 2 -: Page - 2 - of 6 2.0 We have noted that both the appeals of the assessee are on identical issue of addition made by the Ld.AO on account of unexplained deposits in the bank account of the assessee. The Ld. First Appellate Authority confirmed the order of the Ld.AO. Consequently both the appeals are taken together. For the purposes of this adjudication, we take AY – 2011-12 as the lead year and consider the figures thereof. The decision would apply mutatis mutandis to AY-2012-13 which is resting on identical facts. 3.0 It has been noted that there is a delay of 145 days and 152 days in the ITA Nos.2432 & 2433 respectively in filing of these appeals before the tribunal. In its affidavit the assesse has pleaded that the assesse was having adverse medical issues which contributed to the delay. Medical certificate to this effect was filed. It was further stated that the assessee’s counsel stays in different city and therefore contributed to the delay. All these activities contributed to the delay which was neither willful nor wanton. The assesse submitted that there will not be case of any non- compliance now. We have considered the justification put forth by the assesse and we are satisfied with their adequacy. We are also conscious of the fact that no litigant gains by intentionally delaying its own matters. The Ld. DR did not pose any serious objections to the delay. ITA No.2432 & 2433/Chny/2024 :- 3 -: Page - 3 - of 6 Accordingly, we hereby condone the delay and proceed to adjudicate these appeals. 4.0 Drawing reference from the order of Ld. AO for AY-2011-12, the Ld. Counsel for the assessee informed that the department had received information of the assessee was not filing return of income but was having large cash deposits in its bank account maintained with ICICI bank, Tamil Nadu Mercantile bank, Axis bank etc. Consequently the proceedings u/s. 147/148 were initiated to reassess the income. The assessee’s response during the assessment proceeding was lukewarm and noting the same and in the absence of satisfactory explanations to the Ld.AO’s show cause notices, an addition of Rs.2,60,78,732/- was made in the hands of the assessee. The Ld. First Appellate Authority also sustained the addition on account of non-appearance of the assessee during appellate proceedings. 5.0 We have heard rival submission in the light of material available on records. The Ld. Counsel for the assessee has contested the assessment order on legal grounds on the premise of reasons not been provided to him by the Ld.AO before making the addition. It has been argued that the order thus becomes bad in law. The Ld. DR informed that no request was made for the supply of reasons by the assessee. During the course of present proceedings, nothing was brought on record ITA No.2432 & 2433/Chny/2024 :- 4 -: Page - 4 - of 6 to indicate that the assessee had made any request to the Ld. AO. The ground of appeal raised by the assessee is thus bereft of any meritorious adjudication and therefore the same is dismissed. 6.0 On merits of the case the Ld. Counsel for the assessee submitted that both the Ld. AO and the Ld. CIT(A) have passed ex-parte orders and therefore requested that the matter deserves to be set aside for readjudication. The Ld. DR would like us to believe on the correctness of the order of lower authorities. As far as the request of the assessee is concerned, the assessee has not been able to adduce any satisfactory explanation to indicate that there existed any justified grounds for non-compliance before the lower authorities. We have noted from the order of the Ld. AO that the same is a non-speaking order wherein addition has been made only on the premise of non-compliance by the assessee. There is nothing on record to indicate to any independent enquiries made by the Ld.AO at his end. In para 5.2 of his order, the Ld.AO observed that assessee’s AR had appeared and informed that the assessee is engaged in the business of real estate. He filed returns of income for AY-2010-11, 2013-14 to 2016-17, partnership deeds, bank statements of ICICI bank, Tamil Nadu Mercantile bank, Axis bank, land and building purchase documents etc. The Ld. AO had asked ITA No.2432 & 2433/Chny/2024 :- 5 -: Page - 5 - of 6 few other documents concerning partners and promotors etc, which remained uncomplied. 6.1 The action of the Ld. AO in treating the entire deposits into banks of Rs.2,60,78,732/- as unexplained in the light of the facts, that the assessee had stated its engagement in the business of real estate, becomes questionable. The Ld. AO has brought no evidence on record to cast any shadow of doubt on the business activity reportedly undertaken by the assessee. Thus, there cannot be any doubt to say that the source of deposits do not have any linkages with the business of real estate undertaken by the assessee. In the light of the same assuming a reasonable profit rate having been earned by the assessee from the business of real estate deserves to be estimated. We are of the view that interest of justice would be met if profit @ 30% from the business of real estate undertaken by the assessee is determined. Accordingly, we direct the Ld. AO to restrict the addition to the extent of 30% of the total deposits found in the bank accounts of the assessee and delete the remaining addition. The grounds of appeal raised by the assessee are therefore partly allowed. 7.0 In the result, the appeal of the assessee for ITA No.2432 for AY- 2011-12 is partly allowed. ITA No.2432 & 2433/Chny/2024 :- 6 -: Page - 6 - of 6 8.0 As regards ITA No. 2433 for AY-2012-13, since the facts are identical to those in ITA No.2432 supra, the decision taken herein above in ITA No.2432 would also apply to ITA No.2433. 9.0 In the result, the appeal of the assessee for ITA No.2433 for AY- 2012-13 is partly allowed. Order pronounced on 10th , January-2025 at Chennai. Sd/- (यस यस नवश्विेत्र रनव) (SS VISWANETHRA RAVI) न्यानयक सदस्य / Judicial Member Sd/- (श्री अनमताभ शुक्ला) (AMITABH SHUKLA) लेखा सदस्य /Accountant Member चेन्नई/Chennai, नदिांक/Dated: 10th , January-2025. KB/- आदेश की प्रतितिति अग्रेतिि/Copy to: 1. अिीिार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT - Salem 4. तिभागीय प्रतितिति/DR 5. गार्ड फाईि/GF "