ROSHNA BABURAJ,KANNUR V. ACIT, CIRCLE-1, KANNUR

ITA 472/COCH/2024

AI Insights

The case involves Roshna Baburaj, a proprietor of M/s.Deccan Agencies, who appealed against the order of the Commissioner of Income-tax (Appeals) [CIT(A)] sustaining an addition of Rs.51,69,000 as unexplained cash credit under section 68 of the Income-tax Act, 1961. This amount was part of Rs.1,35,52,459 initially added by the AO due to large cash deposits in the assessee's bank account during the demonetization period. The CIT(A) partly allowed the appeal, reducing the addition but sustaining the mentioned amount. The assessee argued that the deposits were made by customers, which the ITAT found insufficiently supported by documentary evidence, leading to the decision to remit the case back to the AO for further examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 360912 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Assessee Lawyers: ARUN RAJ S
• Keywords: Opportunity of being heard; Additional evidence; Unexplained cash credit

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Inturi Rama Rao, Accountant Member & Shri Prakash Chand Yadav, Judicial Member ITA No.472/Coch/2024 : Asst.Year 2017-2018 Roshna Baburaj A.V.K.Nair Road MSS Complex, Thalassery Kannur – 670 101. PAN : AHEPB0344B. v. The Asst. Commissioner of Income-tax, Circle – 1 Kannur. (Appellant) (Respondent) Appellant by : Sri.Arun Raj S, Advocate Respondent by : Smt.Leena Lal, Sr.AR Date of Hearing : 21.05.2025. Date of Pronouncement : 22.05.2025 O R D E R Per Prakash Chand Yadav, JM : The present appeal of the assessee is arising from the order of the National Faceless Appeal Centre / learned Commissioner of Income-tax (Appeals) [“CIT(A)” for short] dated 27.03.2024, having DIN & Order No.ITBA/NFAC/S/250/2023- 24/1063456687(1) and relates to the assessment year 2017- 2018. 2. The assessee has raised ten grounds of appeal, however, the solitary issue is to be decided whether the CIT(A) was justified in sustaining the addition of Rs.51,69,000 added by the Assessing Officer on account of unexplained cash credit for ITA No.472/Coch/2024. Roshna Baburaj. 2 the sums deposited by assessee in the bank account during demonetization period. 3. Brief facts of the case as coming out from the orders of the authorities below are that the assessee is proprietor of one M/s.Deccan Agencies, which is engaged in the trading of home appliances and SIM cards. The assessee filed her return of income for the impugned year declaring an income of Rs.56,48,540. The return of income filed by the assessee was picked up for scrutiny for verifying the cash deposited by the assessee during the period of demonetization. During the course of assessment proceedings, the AO inter alia observed that huge cash was deposited by the assessee during demonetization period. The AO conducted inquiries u/s.133(6) of the Act from the concerned banks and also sought explanation of the assessee with respect to the source of this amount. Dissatisfied with the explanation of the assessee the added this amount as unexplained cash credit u/s.68 of the Income-tax Act, 1961, amounting to Rs.1,35,52,459. 4. Aggrieved with the order of the AO, the assessee filed an appeal before the learned CIT (A). The ld.CIT(A) after considering the entire gamut of the facts, partly allowed the appeal of the assessee, and has sustained the addition of Rs.51,69,000 only. 5. Aggrieved with the order of the ld.CIT(A), the assessee has come up in appeal before us. The learned Counsel for the assessee argued that the cash has been deposited by various ITA No.472/Coch/2024. Roshna Baburaj. 3 customers in the account of the assessee, and hence, it cannot be said that the amounts were not explained successfully. 6. The learned DR, appearing on behalf of the Revenue, relied upon the orders of the authorities below. 7. We have heard the rival submissions and perused the material available on record. The arguments advanced by the assessee that the customers have deposited these amounts directly in the bank account of the assessee, is not supported with any documentary evidences. The assessee has also failed to provide any details vis-à-vis goods supplied to the so called customers who have deposited the amount in the bank account of the assessee. The learned Counsel for the assessee has placed on record certain additional evidences before us under Rule 29 of the Income Tax Rules, 1962. Considering the facts and circumstances of the case, we remit this matter back to the file of the AO for examining the case de novo, in accordance with law, needless to say that the AO will afford a reasonable opportunity of being heard to the assessee. 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on this 22nd day of May, 2025. Sd/- (Inturi Rama Rao) Sd/- (Prakash Chand Yadav) ACCOUNTANT MEMBER JUDICIAL MEMBER Cochin; Dated : 22nd May, 2025. Devadas G* ITA No.472/Coch/2024. Roshna Baburaj. 4 Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT, Cochin. 4. The DR, ITAT, Cochin. 5. Guard File. Asst.Registrar/ITAT, Cochin "