RAMESH SREENIVASALU,SALEM V. DCIT, CIRCLE-1(1), SALEM

ITA 245/CHNY/2024

AI Insights

The case involves an appeal by Ramesh Sreenivasalu against the order of the Learned Commissioner of Income Tax, Appeal, National Faceless Appeal Centre, Delhi, which confirmed the addition of a cash deposit of Rs. 22,94,500 during the demonetization period as unaccounted income under section 69 of the Income-tax Act, 1961. The AO also estimated further income at 8% of total cash deposits outside the demonetization period. The assessee, engaged in the business of supplying Pepsi products and homemade snacks, contested these additions, supported by an agreement with PepsiCo India Holdings Pvt. Ltd. and financial statements, which were not considered by the lower authorities due to lack of documentary evidence at the initial stages.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 107241 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 02-09-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 29-01-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R.ANITA
• Assessee Lawyers: KATHIR
• Keywords: Reasonable cause; Income from undisclosed sources; Non compliance
• Section: 143(3); 69

Judgement Text

"आयकर अपीलीय अिधकरण, ‘सी’ \u0011ा यपीठ, चे\u0016ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI \u0019ी एबी टी. वक\u001f, \u0011ा ियक सद! एवं \u0019ी जगदीश, लेखा सद! क े सम( BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.245/Chny/2024 िनधा8रण वष8 /Assessment Year: 2017-18 Ramesh Sreenivasalu, 26, Royal Garden, Meyyanur Bye Pass Road, Salem – 636 004. Vs. The Dy. Commissioner of Income Tax, Circle-1(1), Salem. [PAN: ACCPR 2306N] (अपीलाथ\u0007/Appellant) (\b\tयथ\u0007/Respondent) अपीलाथ\u001f की ओर से/ Appellant by : Shri Kathir, Advocate HIथ\u001f की ओर से /Respondent by : Ms. R. Anita, Addl. CIT सुनवाई की तारीख/Date of Hearing : 02.09.2024 घोषणा की तारीख /Date of Pronouncement : 30.10.2024 आदेश / O R D E R PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2017-18 arises out of the order of Learned Commissioner of Income Tax, Appeal, National Faceless Appeal Centre (NFAC), Delhi [hereinafter “CIT(A)”] dated 11.01.2024 in the matter of assessment framed by the Assessing Officer [AO] u/s. 143(3) of the Income-tax Act,1961 (hereinafter “the Act”) on 21.12.2019. ITA No.245/Chny/2024 :- 2 -: 2. The effective ground of appeal in this appeal of assessee is against the order of Ld. CIT(A) in confirming the addition of cash deposit during demonetization period of Rs. 22,94,500/- and estimating further the income @ 8% of cash deposits in rest of the period. 3. The assessee is engaged in the business of supplying of Pepsi products like soft drinks, mineral water, confectionaries, etc. and also homemade snacks items to various petty shops in and around Salem on cash basis and has filed return of income declaring total income of Rs. 10,37,550/-. The assessee during demonetization period has made a cash deposit of Rs. 22,94,500/- in his saving bank account as under: Name of Bank Account Number Total cash deposit during other than the demonetization period Demonetized currency deposited during the demonetization period. Yes Bank 007963700000366 1,27,89,000/- 19,08,000/- South Indian Bank 007963700000366 1,90,95,000/- - Indian Bank 939631281 28,14,500/- 3,86,500/- Total 3,46,98,500/- 22,94,500/- ITA No.245/Chny/2024 :- 3 -: 4. The A.O held the cash deposited as unaccounted income and added u/s. 69 of the Act. The A.O has also estimated the income @8% of total cash deposit in other than demonetization period at Rs. 44,27,718/- and thus making further addition of Rs. 3,54,217/-. The Ld. CIT(A) has confirmed the addition as the assessee has not filed any documentary evidence/explanation regarding the cash deposit. 5. The Ld. Authorized Representative (A.R) of the assessee before us has submitted a copy of agreement between assessee and PepsiCo India Holdings Pvt. Ltd. and also submitted that profit and loss account and balance sheet in support of his contention that the cash deposit was out of sale made . The Ld. AR however admitted that evidences could not be produced before the lower authorities and one more opportunity be provided to prove his case , in the interest of justice. 6. The Ld. Departmental Representative (DR), on the other hand, has relied on the orders of lower authorities and argued that order of LD CIT(A) be upheld. ITA No.245/Chny/2024 :- 4 -: 7. We have heard the rival submissions, and perused the materials available on record. The assessee did not provide essential documents to substantiate his claim before both the AO and the Ld CIT(A). This non compliance has resulted in unnecessary delay and inconvenience not only to the department but also in terms of judicial resources, The assessee has failed to provide a reasonable cause for such omission. Therefore in the interest of justice and to provide the assessee with one final opportunity to present his case, the matter is remanded back to the AO. The AO shall conduct a fresh assessment after allowing assessee an opportunity to submit relevant documents. However, considering the assessee’s failure to provide necessary documentation at the initial stages, we find appropriate to impose cost. Accordingly, the assessee is directed to pay the costs of Rs.20,000/-. The same shall be paid by the assessee to Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras within a period of one month from the date of receipt of this order and produce the receipt before the A.O. We also direct the assessee to appear before the A.O. on the date of hearing without fail. In view of the above, the appeal filed by the assessee is allowed for statistical purposes. ITA No.245/Chny/2024 :- 5 -: 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 30th October, 2024. Sd/- Sd/- (एबी टी. वक\u001f) (ABY. T. Varkey) \u0011ाियक सद! / Judicial Member (जगदीश) (Jagadish) लेखा सद! /Accountant Member चे\u0010नई/Chennai, \u0013दनांक/Dated: 30th October, 2024. EDN/- आदेश क\u0016 \bितिल\u0019प अ\u001aे\u0019षत/Copy to: 1. अपीलाथ\b/Appellant 2. \t थ\b/Respondent 3. आयकर आयु\u0010/CIT, Salem 4. िवभागीय \tितिनिध/DR 5. गाड\u0019 फाईल/GF "