SUBBA REDDIAR RAJENDRAN, THIRUNELVELI,THIRUVENGADAM, THIRUNELVELI V. ACIT, CIRCLE 1, TIRUNELVELI, INCOME TAX OFFICE, TIRUNELVELI

MA 46/CHNY/2025

AI Insights

The case revolves around a Miscellaneous Application filed by the assessee, Subba Reddiar Rajendran, seeking rectification of a mistake in the Income Tax Appellate Tribunal's earlier order concerning the assessment year 2017-18. The dispute centered on the treatment of an amount of Rs.29,70,068, which was added to the capital account of 'Padma Clinic' but was correspondingly reduced from the business capital account of 'Gomathi Stone Works'. The assessee argued that this amount was properly accounted for and should not be treated as an unexplained investment. The Tribunal, upon reviewing the detailed explanations and the financial records provided by the assessee, agreed that the initial order contained a mistake and rectified it by directing the Assessing Officer to treat the amount as explained.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 779441 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Appeal Filed On: 07-04-2025
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R.ANITA; C.I.T
• Assessee Lawyers: WAYOFTHISMISCELLANEOUSAPPLICATIONISSEEKING
• Keywords: Unexplained cash credit; Unexplained investment

Judgement Text

" आयकर अपील य अ धकरण, ‘सी’ \u000eयायपीठ, चे\u000eनई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI \u0015ी एबी ट वक\u001a, \u000eया\u001bयक सद य एवं \u0015ी एस. आर. रघुनाथा, लेखा सद य क े सम$ BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, ACCOUNTANT MEMBER M.A. No.46/Chny/2025 [In I.T.A. No.27/Chny/2025] \u001bनधा%रण वष%/Assessment Year: 2017-18 Subba Reddiar Rajendran, No.233, Kalugumalai Road, Thiruvengadam, Thirunelveli – 627 719. Vs. ACIT, Circle -1, Thirunelveli. [PAN: ABMPR-4211-M] ('ाथ%क /Petitioner) ('(यथ)/Respondent) 'ाथ%क क* ओरसे/ Petitioner by : Shri. T. Vasudevan, Advocate '(यथ) क* ओर से/Respondent by : Ms. R. Anita, Addl. C.I.T. सुनवाई क* तार ख/Date of Hearing : 18.07.2025 घोषणा क* तार ख/Date of Pronouncement : 13.10.2025 आदेश /O R D E R PER S.R.RAGHUNATHA, AM: The assessee by way of this Miscellaneous Application is seeking rectification of the following mistakes apparent on record in the order passed on 07.03.2025 in ITA No.27/Chny/2025 for the assessment year 2017-18: 2. The mistake pointed out by the assessee is that the observation at para 12 of page 11 of the order, that “the assessee has filed a reconciliation of capital account difference to the tune of Rs.1,22,12,439/- and hence we deem it fit to delete the same. However, an amount of Rs.29,70,068/- has been added to the capital Printed from counselvise.com :-2-: MA No:46/Chny/2025 account of the profession as on 31.03.2016 in the reconciliation statement without reducing the same from the business capital account and hence we are inclined to sustain the addition as unexplained investment in the capital account.” 3. The Ld. AR in this regard submitted that the amount of Rs.29,70,068/- added to the capital account of the profession ‘Padma Clinic’ was correspondingly reduced from the business capital account of ‘Gomathi Stone Works’ as on 31.03.2016. The corresponding entries are reflected in the capital accounts and the consolidated Balance sheet drawn as on 31.03.2016 (Page 12 of the Additional Paper Book). It is seen from the Balance sheet that a sum of Rs.29,70,068/- is shown under “Assets” side as ‘Branch / Division Gomathi Stones (Padma Clinic)’. There is a corresponding credit in the liabilities side of the Balance Sheet under the Capital account. Also, it can be seen from pages 10 and 11 of the same paper book that the individual balance sheet of both the units reflects the respective debit and credit entries of Rs.29,70,068/-. The break up for Rs.1,06,33,903/- seen in Page 11 is available in Page 2 of the main paper book. Hence, the amount of Rs.29,70,068/- stands explained and reconciled. 4. The ld.AR submitted that in view of the clear book entries, there is no case to treat the amount as unexplained credit of investment. Therefore, the direction of the Tribunal to the AO to add the amount of Rs.29,70,068/- is a mistake apparent on the face of the record warranting rectification. 5. The Ld.DR on the other hand, vehemently argued that these are not mistakes apparent on record. Printed from counselvise.com :-3-: MA No:46/Chny/2025 6. We have heard the rival submissions and perused the material available on record. The Ld.AR has explained in detail that Rs.29,70,068/- added to the capital account of the profession ‘Padma Clinic’ was correspondingly reduced from the business capital account of ‘Gomathi Stone Works’ as on 31.03.2016. The ld.AR drew our attention to the Page No.10 of the additional paper book, wherein the amount withdrawn from ‘Gomathi Stone Metal Works’ has been shown under “Assets” side as ‘Branch / Division’ to the tune of Rs.29,70,068/-, instead of reducing from the capital account. Further, the ld.AR also took us through Page No.12 of the additional paper book i.e. consolidated Balance sheet of the assessee, wherein the amount Rs.29,70,068/- has been shown under the Asset side of the balance sheet under ‘Branch / Division – Gomathi Stones (Padma Clinic), which clearly demonstrates that the amount has been drawn from the business of the assessee. 7. On perusal of the records and financials, we find that the amount of Rs.29,70,068/- which was added to the capital account shown in the profession, has been drawn from the books of the business of the assessee during the impugned assessment year 2016-17, which is evident from the balance sheet of the business (Gomathi Stone Metal Works) as well as the consolidated Balance sheet as on 31.03.2016. The said withdrawal of Rs.29,70,068/- from business has been shown under ‘Asset’ side under the head “Branch / Divisions (Padma Clinic)”. In view of the above, in the present facts and circumstances of the case that there was a mistake apparent on record in the order i.e. ITA No.27/Chny/2025 passed by the Tribunal and hence we are inclined to rectify the same. Hence, we direct the AO to Printed from counselvise.com :-4-: MA No:46/Chny/2025 consider the said amount of Rs.29,70,068/- as explained source of investment and delete the addition made accordingly. 8. In the result the Miscellaneous Application filed by the assessee is allowed. Order pronounced in the open court on 13th October, 2025 at Chennai. Sd/- Sd/- (एबी ट वक\u001a ) (ABY T VARKEY) \u000eया\u001bयक सद य/JUDICIAL MEMBER (एस. आर. रघुनाथा) (S. R. RAGHUNATHA) लेखासद य/ACCOUNTANT MEMBER चे\u000eनई Chennai: .दनांक Dated : 13th October, 2025 sp आदेश क* '\u001bत0ल1प अ2े1षत /Copy to: 1. अपीलाथ)/Appellant 2. '(यथ)/Respondent 3. आयकरआयु3त/CIT, Chennai/Coimbatore/Madurai/Salem. 4. 1वभागीय'\u001bत\u001bन ध/DR 5. गाड%फाईल/GF Printed from counselvise.com "