SUBBIAH RAJENDRAN,NAMAKKAL V. ITO, WARD-2, NAMAKKAL, NAMAKKAL

ITA 2124/CHNY/2025

AI Insights

The case involves an appeal by Subbiah Rajendran against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Center, Delhi, which confirmed the addition made by the Assessing Officer under section 69A of the Income Tax Act, 1961. The addition was based on a cash deposit of Rs.1,00,31,039/- in the assessee's bank account, which was not explained satisfactorily. The assessee, a commission agent in onion trading, argued that the deposits represented gross business receipts and not taxable income. The Tribunal acknowledged the assessee's business and estimated the commission income at 4% of the deposits, thus partly allowing the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 780485 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 31-07-2025
• Other Referred Cases: AY-2009-10
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAUJANYA RANJAN; IRS
• Assessee Lawyers: P.M. KATHIR
• Keywords: Business income
• Section: 147; 144; 143(3)

Judgement Text

"आयकर अपीलीय अधिकरण, ’डी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI श्री एबी टी. वर्की, न्यायिर्क सदस्य एवं श्री अयिताभ शुक्ला, लेखा सदस्य क े समक्ष BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.2124/Chny/2025 Assessment Years: 2012-13 Subbiah Rajendran No.2/93, Kalangani Street, Pottirettipatti (PO), Namakkal, Tamil Nadu-637 013. [PAN: ALZPR5613G] Income Tax Officer, Ward-2, Namakkal. (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Mr.P.M.Kathir, Advocate प्रत्यर्थी की ओर से /Revenue by : Mr.Saujanya Ranjan, IRS सुनवाई की तारीख/Date of Hearing : 24.09.2025 घोषणा की तारीख /Date of Pronouncement : 09.10.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M : This appeal is filed by the assessee against the order bearing DIN & Order No.ITBA / NFAC / S / 250 / 2025-26 / 1078517419(1) dated 15.07.2025 of the Learned Commissioner of Income Tax [herein after “CIT(A), National Faceless Appeal Center [NFAC], Delhi, for the assessment year 2012-13. The reference to the word “Act” in this order hereinafter shall mean the Income Tax Act, 1961 as amended from time to time. Printed from counselvise.com ITA No.2124/Chny/2025 Page - 2 - of 4 2.0 The assessee has assailed the assessment order of Ld. CIT(A) in confirming the addition made by the Ld.AO, both on legal grounds as well as merits of the addition. On legal infirmities, the sufficiency of reasons have been challenged. Further, the merits of addition have been challenged in the light of the factual backdrop of the case. 3.0 Arguing against the merits of the addition, the Ld.Counsel for the assessee submitted that the addition made by the Ld.AO is totally unwarranted. As per order u/s 144 r.w.s. 147 dated 16.12.2019, the Ld.AO had noted cash deposit of Rs.1,00,31,039/- in assessee’s bank account maintained with the ICICI bank. The assessee was noted to have not filed its Return of Income. The assessee did not comply with the statutory notices issued by the Ld.AO leading him to make the impugned addition of Rs.1,00,31,039/- u/s 69A of the Act. Before the Ld. CIT(A) the assessee submitted that it is a commission agent of onion and that the impugned cash deposits represent its gross business receipts. It was argued that the assessee is only entitled to get commission on the said gross receipts and that therefore the addition of entire cash deposit was unwarranted. The Ld.CIT(A) did not found favour with the arguments and proceeded to confirm the addition made by the Ld.AO. 4.0 The Ld.Counsel for the assessee reiterated the arguments made before the Ld.CIT(A). It was contested that, as in the past, the assessee Printed from counselvise.com ITA No.2124/Chny/2025 Page - 3 - of 4 is not maintaining any books of accounts and therefore no addition u/s 69A per se was permissible. It was also urged that the assessee is regularly doing the same line of business and that in earlier years Revenue has accepted its proposition and has made addition of commission income on estimate basis. Reference was placed upon order u/s 143(3) for AY-2009-10 dated 14.11.2011 where an addition of Rs.2 lakhs, additional commission income, was made on estimate basis. 5.0 Per contra, the Ld.DR relied upon the order of lower authorities. It was contended that the assessee did not comply to the statutory notices of the Ld.AO and has failed to provide any satisfactory explanation in respect of the cash deposits. 6.0 We have heard the rival submissions in the light of material available on records. It is an accepted fact on record that the assessee has been engaged in the business of onion trading. This fact has not been controverted by the Revenue and rather accepted in earlier years as evident from order for AY-2009-10 supra. The entire cash deposits therefore cannot be treated as assessee’s profit from onion sales and that too as a commission agent where the margins are not very high. Be that as it may be we are of the considered view that in the interest of justice, an estimation of 4% as commission income of assessee upon the cash deposits made in the bank account would be reasonable and appropriate. Accordingly, we direct the Ld.AO to restrict his addition at Printed from counselvise.com ITA No.2124/Chny/2025 Page - 4 - of 4 4% of the cash deposits of Rs.1,00,31,039/- and delete the balance addition. All the grounds of appeal raised by the assessee on merits of addition are therefore partly allowed. 7.0 As the assessee has succeeded qua the merits of addition, its contest raised through legal grounds is left open. 8.0 In the result, the appeal of the assessee is partly allowed. Order pronounced on 9th , October-2025 at Chennai. Sd/- (एबी टी. वर्की) (ABY T VARKEY) न्याधयक सदस्य / Judicial Member Sd/- (अधमताभ शुक्ला) (AMITABH SHUKLA) लेखा सदस्य /Accountant Member चेन्नई/Chennai, धदनांक/Dated: 9th , October-2025. KB/- आदेश की प्रतितिति अग्रेतिि/Copy to: 1. अिीिार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT - Chennai/Coimbatore/Madurai/Salem. 4. तिभागीय प्रतितिति/DR 5. गार्ड फाईि/GF Printed from counselvise.com "