RAMAKRISHNAN GURUSAMY ,SALEM V. ITO, WARD-1(8), SALEM

ITA 488/CHNY/2025

AI Insights

The case involves Shri Ramakrishnan Gurusamy, an individual and one of the partners of M/s. Madhuraj Associates, who appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The appeal was related to the assessment year 2013-14, where the assessee's share in a property purchase by the firm was questioned regarding its source of funding. The Income Tax Officer (ITO) added Rs.70,67,200/- as unexplained investment, which the FAA upheld. The assessee argued that the loans were taken through banking channels and supported by various documents. However, the FAA dismissed the appeal due to insufficient evidence provided by the assessee to substantiate the creditworthiness of the lenders and the genuineness of the transactions. The Tribunal, while deprecating the assessee's nonchalant attitude, restored the matter to the FAA for a final decision, providing the assessee a last opportunity to substantiate his claims.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 398388 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRYATI SHARMA
• Assessee Lawyers: T.S. LAKSHMI VENKATARAMAN
• Keywords: Condonation of delay; Additional evidence; Unexplained investment; Competent authority
• Section: 148; 69

Judgement Text

"आयकर अपीलȣय अͬधकरण, ‘ए’ Ûयायपीठ, चेÛनई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI Įी जॉज[ जॉज[ क े, उपाÚय¢ एवं Įी एस.आर.रघुनाथा, लेखा सदèय क े सम¢ BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENTAND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.:488/CHNY/2025 िनधाᭅरण वषᭅ/Assessment Year:2013-14 Shri Ramakrishnan Gurusamy, 26-1/A, Meenavar Kudiyiruppu Paguthi, Kaveri Bridge, Metturdam, Salem – 636 401. PAN: ANQPR 4563E Vs. The Income Tax Officer, Ward 1(8), Salem. (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri T.S. Lakshmi Venkataraman, FCA ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Ms. Pryati Sharma, JCIT सुनवाई कᳱ तारीख/Date of Hearing : 04.06.2025 घोषणा कᳱ तारीख/Date of Pronouncement : 06.06.2025 आदेश /O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: This appeal at the instance of the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 29.04.2024, passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2013-14. - 2 - ITA No.488/CHNY/2025 2. There is a delay of 233 days in filing the appeal. The assessee has filed a petition for condonation of delay supported by an affidavit. The reasons stated for belated filing of this appeal is there was no real time alert and assessee nor his authorized representative has been served with hearing notices vide e-mail or to their mobile. It is stated that the receipt of the appellate order was seen by the assessee in the Income-tax portal only in the month of February, 2025. It is further stated that the belated filing of the appeal is neither willful nor wanton. It is stated that assessee’s bonafide is proved by the fact that the assessment order dated 30.12.2019 was served on the assessee on 31.12.2019 and an appeal has been filed before the First Appellate Authority within the due date prescribed. Therefore, it was prayed that the delay in filing the appeal may be condoned for substantial justice and equity. After considering the reasons stated in the condonation application/affidavit of the assessee, we are of the view that there is sufficient cause for belated filing of appeal and no latches can be attributed to the assessee. Hence, we condone the delay of 233 days in filing the appeal and proceed to dispose off the same on merits. 3. The grounds raised by the assessee read as follows: Grounds of Appeal - 3 - ITA No.488/CHNY/2025 1. On the facts and circumstances of the case the order of first appellate authority dated 29.04,.2024 in dismissing the appeal of the appellant is bad in law and is not legally justified. 2. On the facts and circumstances of the case the lower authorities are not justified in not furnishing the reasons recorded for issue of notice U/s 148 of the Act. 3. On the facts and circumstances of the case the lower authorities are not justified in not providing the copy of satisfaction note given by the competent authority in terms of section 151l of the Act. 4. On the facts and circumstances of the case the first appellate authority is not justified in sustaining the addition of Rs.70,67,200/- which represents the investment made in M/s Madhuraj Associates during the financial year 2012-13. The assessee has given a party wise detailed break up of the above amount and also given valid proofs like Voters Id, Ration card etc along with full addresses of the above said 10 persons. This act eliminates the onus cast upon the assessee and it is the duty of the AO to verify the creditworthiness of the above mentioned persons. It could be seen that all the amounts stated above to an extent of Rs.48,00,000/- are via banking channel like cheque, thus the AO is not justified in considering the above said amounts as unexplained money and assessing the same by invoking the provisions of section 69 of the Act as unexplained investment. 5. On the facts and circumstances of the case a sum of Rs.7,10,552/- brought to assessment represents gold loan raised by the assessee from axis bank and another sum of Rs. 15.72,000/- brought to assessment represents own funds of the assessee and in view of this both the above additions are not justified. 6. There is a delay in filing the appeal for which delay condonation petition will be filed at the time of appeal hearing. 7. In view of the above grounds and other submissions to be made at the time of Appeal hearing, the order U/S 250 passed by Commissioner of Income Tax (Appeals),NFAC may be cancelled and justice rendered. 4. Brief facts of the case are as follows: The assessee is an individual. The assessee is one of the nineteen partners of M/s. - 4 - ITA No.488/CHNY/2025 Madhuraj Associates (Firm). The firm purchased a property (land and building) which was auctioned by the Hon’ble High Court of Madras for a sum of Rs.19,11,99,692/- on 07.06.2012. The share of the assessee in purchase of the above said property by the firm was Rs.78,87,200/-. As the assessee had not filed the original return of income for the assessment year 2013-14, the case was selected for scrutiny and notice u/s.148 of the Act was issued on 26.03.2019. In response to the notice issue u/s.148 of the Act, the assessee filed his return of income on 16.10.2019 for assessment year 2013-14 declaring total income of Rs.2,12,379/-. During the course of assessment proceedings, assessee was directed to explain the source of Rs.78,87,200/- for his share/contribution for the purchase of property by the firm namely M/s. Madhuraj Associates. The assessee submitted Rs.8,20,000/- is the opening balance in the firm and balance Rs.70,67,200/- was invested by taking loan from lenders and assessee’s own funds. As the assessee was not able to prove the creditworthiness of the lenders and the genuineness of the loan, the assessment was completed u/s.143(3) r.w.s. 147 of the Act vide order dated 30.12.2019 by making an addition of Rs.70,67,200/-. 5. Aggrieved by the assessment completed u/s.143(3) r.w.s. 147 of the Act, the assessee filed appeal before the First Appellate - 5 - ITA No.488/CHNY/2025 Authority (‘FAA’). Before the FAA, the assessee submitted that he has received loans from different persons and filed confirmations. The assessee also filed copies of cheques in case of some of the lenders. It was stated in the written submission that assessee had received the said loans through banking channels and copies of the bank statements were enclosed. On receipt of the written submission and the additional evidences filed such as the copies of cheques leafs and the bank statements, the FAA forwarded the same to the AO for a remand report. The AO submitted the remand report vide his letter dated 18.03.2024. In the remand report, the AO reiterated that assessee was given several opportunities during the course of assessment proceedings and he had failed to prove the genuineness of transaction and the creditworthiness of the lenders. The AO stated that assessee had filed only the profit and loss account, balance sheet and the bank statements. As regards the AO’s direction to furnish creditworthiness of the lenders namely, PAN, proof of identity, confirmation letters, the details of source of income, the details of income-tax returns filed by the lenders, etc., were not furnished. 6. The FAA forwarded the remand report to the assessee vide letter dated 26.03.2024, directing the assessee to give his comment on the same by 02.04.2024. The assessee however sought for an - 6 - ITA No.488/CHNY/2025 adjournment for gathering the material from multiple sources. Accordingly, the case was refixed on 22.04.2024 vide notice dated 16.04.2024. However, the assessee again sought for adjournment vide his letter dated 23.04.2024. The FAA dismissed the appeal of the assessee. The FAA held that inspite of sufficient opportunities, assessee has failed to rebut the remand report submitted by the AO and has not produced PAN, ITR and confirmation letters of the lenders. 7. Aggrieved by the FAA’s order, the assessee has filed the present appeal before the Tribunal. The Ld.AR submitted that assessee has obtained the relevant details such as identity of the creditors, the capacity of the creditor to advance money and the genuineness of the transaction. Hence, it was prayed as a last opportunity the case may be restored to the files of the AO so that the necessary evidences/confirmation details of the lenders could be placed on record. 8. The Ld.DR strongly supported the orders of the AO and the First Appellate Authority. - 7 - ITA No.488/CHNY/2025 9. We have heard rival submissions and perused the material on record. A sum of Rs.70,67,200/- has been added as unexplained investment by invoking the provisions of section 69 of the Act. The break-up of the above amount finds a place at page 2 of the assessment order. It is stated that all the borrowings shown in the above break-up are through banking channels. The assessee had submitted details of loan, name of the lenders, bank statement and cheque leaf before the FAA. The FAA had forwarded the additional evidences filed, to the AO for a remand report. The AO submitted his remand report and CIT(A) directed the assessee to file rejoinder to the same. Inspite of several opportunities, the assessee was seeking time to file his response to the remand report submitted by AO. Hence, the FAA dismissed the appeal of the assessee. We strongly deprecate the nonchalant attitude of the assessee. However, in the interest of justice and fair play, as a last opportunity, we restore the matter to the files of the First Appellate Authority. The assessee is directed to file rejoinder to the remand report and shall furnish necessary evidences in support of the source for a sum of Rs.70,67,200/-. The assessee shall co-operate with the Revenue for an expeditious disposal of the appeal. It is ordered accordingly. - 8 - ITA No.488/CHNY/2025 10. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 6th June, 2025 at Chennai. Sd/- Sd/- (एस.आर. रघुनाथा) (S.R. RAGHUNATHA) लेखा सदèय/ACCOUNTANT MEMBER (जॉज[ जॉज[ क े) (GEORGE GEORGE K) उपाÚय¢ /VICE PRESIDENT चेÛनई/Chennai, Ǒदनांक/Dated, the 6th June, 2025 RSR आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy to: 1. अपीलाथȸ/Appellant 2. Ĥ×यथȸ/Respondent 3. आयकर आयुÈत /CIT, Salem 4. ͪवभागीय ĤǓतǓनͬध/DR 5. गाड[ फाईल/GF. "