SRI ELUMALAIYAN ALUMINIUM & GLASS HOUSE,SALEM V. ITO, WARD-1(4), SALEM

ITA 2151/CHNY/2024

AI Insights

The case involves Sri Elumalaiyan Aluminium & Glass House, a firm engaged in trading of Aluminium, glass, boards, plywood, and hardware, which appealed against the order of the Learned Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi. The appeal was concerning the assessment year 2017-18, where the Assessing Officer had added Rs. 18,58,501 as unexplained cash deposit during the demonetization period, under section 68 of the Income-tax Act, 1961. The assessee argued that these were legitimate business receipts. The Tribunal, after reviewing the profit and loss account, balance sheet, and other documents, agreed with the assessee's explanation and deleted the addition.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 29869 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P.K. SENTHIL KUMAR
• Assessee Lawyers: T.S. LAKSHMI VENKARAMNAN
• Keywords: Business income
• Section: 143(3); 68

Judgement Text

" आयकर अपीलीय अिधकरण, ‘ए’ \u0011ा यपीठ, चे\u0016ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI \u0019ी एबी टी. वक\u001e, \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.2151/Chny/2024 िनधा9रण वष9 /Assessment Year: 2017-18 Sri Elumalaiyan Aluminium & Glass House, Old No.3-115, New No.45, Periyar Colony, Dadagapatti Gate, Salem – 636 006. Vs. The Income Tax Officer, Ward-1(4), Salem. [PAN: ACTFS 9117P] (अपीलाथ\u0007/Appellant) (\b\tयथ\u0007/Respondent) अपीलाथ\u001e की ओर से/ Appellant by : Shri T.S. Lakshmi Venkaramnan, FCA HIथ\u001e की ओर से /Respondent by : Shri P.K. Senthil Kumar, Addl. CIT सुनवाई की तारीख/Date of Hearing : 13.11.2024 घोषणा की तारीख /Date of Pronouncement : 31.01.2025 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, National Faceless Appeal Centre (NFAC), Delhi [hereinafter “CIT(A)”] dated 01.07.2024 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 26.12.2019. ITA No.2151/Chny/2024 :- 2 -: 2. The only effective ground of appeal in this appeal of assessee is against addition of cash deposit in the bank account of Rs.18,58,501/- during demonetization period. 3. The assessee is a firm engaged in the business of trading of Aluminium, glass, boards and plywood and hardware sales and filed its return of income by admitting total income of Rs. 1,99,500/-. The A.O has made deposit of Rs. 18,58,501/- during demonization period and explained the source of cash deposit as the income from business. However, the A.O added addition u/s. 68 of the Act as the assessee was not allowed to accpet SBNs. Aggrieved, the assessee filed an appeal before the Ld. CIT(A). On appeal, the Ld. CIT(A) has confirmed the addition made by A.O. 4. The Ld. Authorized Representative (A.R) of the assessee before us has submitted that the SBNs have been received in the course of normal trading activity in Aluminium and Plywood. The Ld. AR has submitted that the assessee maintains proper books of accounts and alleged cash deposit is duly recorded in the books of account therefore, no addition is called for. ITA No.2151/Chny/2024 :- 3 -: 5. The Ld. Departmental Representative (DR), on the other hand, has relied on the orders of lower authorities. 6. We have heard the rival submissions, and perused the materials available on record. The assessee has explained the source of cash deposit as business receipts, which are duly recorded in the books of account. The assessee has submitted a copy of profit and loss account, balance sheet and Form-3CB, clarifying that the source of cash deposit was out of trade recoveries. The assessee has also submitted that there is a trade debtor of Rs.62,27,874/- in books of account explaining the source of the cash deposit. We accordingly agree with the submission of Ld. AR that source of cash deposit has been adequately explained and addition u/s 68 is not called for and delete the addition. 7. In the result, the appeal filed by the assessee is allowed. Order pronounced on 31st January, 2025. Sd/- Sd/- (एबी टी. वक\u001e) (ABY. T. Varkey) \u0011ाियक सद! / Judicial Member (जगदीश) (Jagadish) लेखा सद! /Accountant Member चे\u0010नई/Chennai, \u0013दनांक/Dated: 31st January, 2025. EDN/- ITA No.2151/Chny/2024 :- 4 -: 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 "