RANJITH KUMAR,CHENNAI V. ITO, NCW-19(6), , CHENNAI

ITA 2041/CHNY/2025

AI Insights

The case involves an appeal by Ranjith Kumar against the order of the Commissioner of Income Tax (Appeals), which confirmed the addition of Rs. 16,81,564 as unexplained cash credit under section 69A of the Income Tax Act. The addition was based on the estimation of net profit at 3% of turnover due to non-compliance with statutory notices and non-filing of a return of income. The Tribunal examined the reasons for the delay in filing the appeal, accepted them as bona fide, and admitted the appeal for adjudication. The main legal issue was whether the CIT(A) was justified in confirming the addition on account of the estimation of net profit at 3% of turnover.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 785372 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Appeal Filed On: 24-07-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C.P. SOLOMON
• Assessee Lawyers: T.VASUDEVAN
• Keywords: Condonation of delay; Unexplained cash credit; Onus to prove
• Section: 148

Judgement Text

"आयकर अपीलीय अिधकरण, ‘‘सी’’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI ŵी ऐम. बालगनेश, लेखा सद˟ एवं ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ क े समƗ Before Shri M. Balaganesh, Accountant Member & Shri S.S. Viswanethra Ravi, Judicial Member आयकर अपील सं./I.T.A. No.2041/Chny/2025 िनधाŊरण वषŊ/Assessment Year: 2017-18 Ranjith Kumar, 418A, Flat No. 1 & 2, 1st Floor, 2nd Link Road, Sadasivam Nagar North, Madipakkam, Chennai 600 091. [PAN: ADNPR0643L] Vs. The Income Tax Officer, Non-Corporate Ward 19(6), Chennai. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri T. Vasudevan, Advocate ŮȑथŎ की ओर से/Respondent by : Shri C.P. Solomon, JCIT सुनवाई की तारीख/ Date of hearing : 23.10.2025 घोषणा की तारीख /Date of Pronouncement : 28.10.2025 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order dated 24.05.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2017-18. 2. We find that this appeal is filed with a delay of 358 days. The assessee filed an affidavit for condonation of delay stating the reasons. Upon hearing both the parties and on examination of the said affidavit, we Printed from counselvise.com I.T.A. No.2041/Chny/25 2 find the reasons stated by the assessee are bonafide, which really prevented in filing the appeal in time. Thus, the delay is condoned and admitted the appeal for adjudication. 3. The assessee raised 8 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the addition on account of estimation of net profit @ 3% of turnover in the facts and circumstances of the case. 4. At the outset, it is noted that the assessee is an individual and no return of income filed. The Assessing Officer found cash deposits in current account and by issuing notice under section 148 of the Act, concluded the assessment by holding that there was no compliance by the assessee to the statutory notices and estimated Rs. 16,81,564/- at 3% of total credits in the current account treating the same as unexplained cash credit on account of unexplained/unaccounted income under section 69A of the Act, which is clear from para 5 of the impugned order. It is noted that the assessee filed written submissions before the first appellate authority, which is reproduced at pages 3 to 7 of the impugned order. On perusal of the same, it is noted that the assessee requested the ld. CIT(A) to determine the net profit based on the commission earned minus indirect expenses. Further, the assessee Printed from counselvise.com I.T.A. No.2041/Chny/25 3 contended that the profit as estimated by the Assessing Officer is not fair and reasonable. The ld. CIT(A) found the said contention is not acceptable and confirmed the addition made by the Assessing Officer by holding that the assessee failed to discharge the burden of proof vide para 5 of the impugned order. The ld. AR reiterated the submissions as made before the ld. CIT(A) and prayed to reduce the profit rate from 3% to 1% as it is very reasonable taking into account the commission earned by the assessee. The ld. AR relied on the submissions as filed before the ld. CIT(A). The ld. DR supported the order of the ld. CIT(A) and argued that the profit rate adopted by the Assessing Officer is justified and there was no return of income filed by the assessee and no evidence brought on record supporting the contentions raised from pages 3 to 7 of the impugned order. After hearing both the parties and considering the submissions made before the ld. CIT(A), we are of the considered opinion that there was no basis for determining profit at 3% by the Assessing Officer, which was confirmed by the ld. CIT(A), therefore, considering the submissions of the ld. AR and also written submissions as reflected at pages 3 to 7 of the impugned order, we are of the opinion that 1% of total credits in current account, is just and proper and accordingly, the grounds raised by the assessee are allowed. Printed from counselvise.com I.T.A. No.2041/Chny/25 4 5. In the result, the appeal filed by the assessee is partly allowed. Order pronounced on 28th October, 2025 at Chennai. Sd/- Sd/- (M. BALAGANESH) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 28.10.2025 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF. Printed from counselvise.com "