PAPPADIYIL BROTHERS,KAYAMKULAM V. ITO, WARD 2 , ALAPPUZHA

ITA 574/COCH/2025

AI Insights

This case involves an appeal by Pappadiyil Brothers, a partnership firm engaged in the grocery business, against the order of the Commissioner of Income Tax (Appeals)/NFAC, Delhi. The appeal pertains to the assessment year 2017-18, where the AO had made additions to the firm's income due to cash deposits during the demonetization period and certain cash payments exceeding Rs. 20,000. The CIT(A) deleted the addition for cash deposits but confirmed the addition for cash payments under section 40A(3) of the Act. The Tribunal's decision to remand the matter for re-examination of specific cash payments highlights the procedural aspects of tax assessment and the importance of verifying claims under specific provisions of the tax law.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772055 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Assessee Lawyers: R. KRISHNAN
• Section: 143(3); 40A(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH :: COCHIN BEFORE SHRI INTURI RAMA RAO, AM& SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No. 574/Coch/2025 Assessment Year: 2017-18 Pappadiyil Brothers, .......... Appellant General Merchants, Market Road, Kayamkulam, Alappuzha, Kerala-690502. [PAN: AAOFP 5348 N] vs. Income Tax Officer, .......... Respondent Ward-3, Alappuzha. Appellant by: Shri R. Krishnan, CA Respondent by: Smt. Leena Lal, Sr. DR Date of Hearing: 22.08.2025 Date of Pronouncement: 26.08.2025 O R D E R Per Inturi Rama Rao, AM: This is an appeal filed by the assessee-firm directed against the order passed by the learned Commissioner of Income Tax (Appeals)/NFAC, Delhi [for short, ‘CIT(A)’], dated 13.06.2025 u/s. 250 of the Income Tax Act, 1961 (for short, 'the Act') for Assessment Year (AY) 2017-18. 2. Brief facts of the case are that the appellant is a partnership firm, engaged in the business of wholesale and retail dealer in the grocery provisions. The return of income for the A.Y. 2017-18 was filed on 01/11/2017 disclosing total income of Rs. 18,02,670/- Printed from counselvise.com 2 ITA No. 574/Coch/2025 Pappadiyil Brothers .Against the said return of income, the assessment was completed by the AO vide order dated 30/12/2019 passed under section 143(3) of the Act at a total income of Rs. 1,00,36,450/-. While doing so, the AO made addition of Rs. 64,98,000/- being the cash deposits in specified bank notes (SBNs) during the demonetization period and also made addition of Rs. 17,35,780/- under section 40A(3) of the Act. 3. Being aggrieved by the assessment order, an appeal was filed by the appellant before the Ld. CIT(A), who vide impugned order, deleted the addition on account of cash deposits made during demonetization period of Rs. 64,98,000/-, however, confirmed the addition of Rs. 17,35,780/- under section 40A(3) of the Act. 4. Being aggrieved, the appellant is in appeal before us challenging the findings of Ld.CIT(A)confirming the addition made under section 40A(3) of the Act of Rs. 17,35,780/-. It is submitted that some of the cash payments exceeding Rs. 20,000/- were made on the days falling on Sundays and public holidays and covered by the exceptions enumerated under the provisions of Rule 6DD of the Rules and, therefore matter may be remanded to the file of the AO to re-examine the issue of addition u/s. 40A(3) of the Act. 5. On the other hand, ld. Sr.DR has no serious objection to remand the matter to the file of AO for fresh examination and verification of the cash payments made on Sundays and public holidays. Printed from counselvise.com 3 ITA No. 574/Coch/2025 Pappadiyil Brothers 6. Considering the rival submissions, we remand the matter back to the file of AO with a direction to exclude the cash payments made on Sundays and public holidays,out of the purview of the provisions of section 40A(3) of the Act, after due verification. Thus, the grounds of appeal raised by the appellant stand partly allowed for statistical purposes. 7. In the result, appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced in open Court on 26th August, 2025. Sd/- Sd/- (RAHUL CHAUDHARY) JUDICIAL MEMBER (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 26th August, 2025 vr/- Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin Printed from counselvise.com "