THANGAVEL KANDASAMY,COIMBATORE V. ITO, NCW 4(1), COIMBATORE

ITA 2019/CHNY/2024

AI Insights

The case involves Thangavel Kandaswamy, who appealed against the order of the Learned Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi, concerning an assessment made under section 144 of the Income Tax Act, 1961. The primary issue was the addition of a cash deposit of Rs. 16,40,500 made during the demonetization period and the subsequent estimation of income at 30% on the total bank credits. The assessee argued that the deposits were related to his employer's business and not his personal income. The Tribunal found merit in the assessee's argument, reducing the estimated income rate to 20%.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 107277 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 21-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 29-07-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R.ANITA
• Assessee Lawyers: S. SRIDHAR; ERODE
• Section: 144; 142(1)

Judgement Text

"आयकर अपीलीय अिधकरण, ‘सी’ \u0011ा यपीठ, चे\u0016ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI \u0019ी महा वीर िसंह, उपा \u001f एवं \u0019ी जगदीश, लेखा सद' क े सम BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.2019/Chny/2024 िनधा 9रण वष9 /Assessment Year: 2017-18 Thangavel Kandaswamy, 24B, Thotasalaimarku Perur, Coimbatore – 641 010. [PAN: DVJPK 8674M] Vs. The Income Tax Officer, Non Corporate Ward-4(1), Coimbatore. (अपीलाथ\u0007/Appellant) (\b\tयथ\u0007/Respondent) अपीला थG की ओर से/ Appellant by : Shri S. Sridhar, Advocate (Erode) IJथG की ओर से /Respondent by : Ms. R. Anita, Addl. CIT सुनवा ई की ता रीख/Date of Hearing : 21.10.2024 घोषणा की ता रीख /Date of Pronouncement : 21.10.2024 आदेश / O R D E R PER JAGADISH, A.M : Aforesaid appeal filed by the assessee is against the order of Learned Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi [hereinafter “CIT(A)”] date05.06.2024 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s.144 of the Income Tax Act, 1961 (hereinafter “the Act”) on 17.12.2019. ITA No.2019/Chny/2024 :- 2 -: 2. The only effective ground of appeal in this appeal of assessee is against addition of cash deposit during demonetization period of Rs. 16,40,500/- and estimation of income @ 30% in the bank deposit. 3. The assessee is individual and has total credit of Rs. 1,21,31,504 in his bank account including cash deposit of Rs. 16,40,500/- during demonization period but has not filed return of income. The A.O therefore issued notice u/s. 142(1) of the Act to file the return. However, the assessee did not file return of income. The A.O therefore passed order u/s. 144 of the Act making addition of cash deposit during demonization period of Rs.16,40,500/- and estimating income @ 30% of the total credit minus cash deposit in the bank account. The assessee during assessment proceedings had contended that he was employed in Somus Properties and was paid a salary of Rs. 15,000/- per month and the deposit in his bank account was of his employer Shri B. Somasundaram, regarding land deals of his business as land developer and promoter. The assessee has submitted that only deposit of Rs. 4,38,504/- is relating to him from his security service business and balance is relating to his employer, which is evident that there has been withdrawn immediately after deposit. The Ld. CIT(A) has confirmed the addition as the assessee ITA No.2019/Chny/2024 :- 3 -: has not furnished any confirmation or acceptance from Shri B. Somasundaram that money received and deposited in this bank account was relating to him. 4. The Ld. Authorized Representative (A.R) of the assessee has submitted that deposit in the back account does not belong to him as all deposits are followed by withdrawn and all credit are money received on behalf of Shri B. Somasundaram . The Ld AR submitted that money credited has been immediately withdrawn and paid to his employer. 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 A.O has estimated the income @ 30% of the total credit in the bank account minus cash deposit of Rs. 16,40,500/- during demonetization period. The assessee has explained that the credit in the bank account is followed by the withdrawal which clearly shows that money does not belong to him. The AO has estimated the income @30% of credit in the bank account. We are of the opinion ITA No.2019/Chny/2024 :- 4 -: that 20% of credit in the bank account will be correct estimate of the income considering the status and nature of work of the assessee. The above estimate will cover the deposit of cash during demonetization period also. In view of the above, we direct the A.O to compute the income @ 20% of the total credit of Rs.1,21,31,504/-. Thus, the appeal filed by the assessee is partly allowed. 7. In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open Court on 21st October, 2024. Sd/- Sd/- (महा वीर िसंह) (Mahavir Singh) उपा \u001f / Vice President (जगदीश) (Jagadish) लेखा लेखा लेखा लेखा सद\u0011य सद\u0011य सद\u0011य सद\u0011य /Accountant Member चे\u0013नई/Chennai, \u0016दनांक/Dated: 21st October, 2024. EDN/- आदेश क\u0019 \bितिल\u001cप अ\u001dे\u001cषत/Copy to: 1. अपीलाथ\u0007/Appellant 2. \b\tथ\u0007/Respondent 3. आयकर आयु\u000f/CIT, Coimbatore 4. िवभागीय \bितिनिध/DR 5. गाड\u0018 फाईल/GF "