THIMME GOWDA NIRIKSHA GOWDA,BANGALORE V. INCOME TAX OFFICER, WARD-3(1)(1), BANGALORE

ITA 487/BANG/2025

AI Insights

The case involves Thimme Gowda Niriksha Gowda, the appellant, who faced scrutiny from the Income Tax Department due to substantial cash deposits amounting to Rs.69,40,000 in his bank account during the assessment year 2018-19, without filing a corresponding income tax return. The AO issued notices under sections 143(2) and 142(1) of the Income Tax Act, 1961, leading to partial compliance from the assessee. The AO treated a significant portion of the cash deposit as unexplained under section 68 read with section 115BBE of the Act, resulting in an increased assessed income. The CIT(A) upheld the AO's decision, applying the peak credit method to estimate the assessee's income. The Tribunal, after considering the submissions and the lack of adequate representation from the assessee, decided to remit the matter back to the AO for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 793412 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2018-2019
• Appeal Filed On: 06-03-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUBRAMANIAN
• Keywords: Unexplained cash credit; Peak credit; TDS
• Section: 147; 148; 144; 142(1); 68

Judgement Text

"ITA No.487/Bang/2025 Thimme Gowda Niriksha Gowda, Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “B’’BENCH: BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.487/Bang/2025 Assessment Year: 2018-19 Thimme Gowda Niriksha Gowda #1142#18, 16th Cross Ullal MNRD Near Mangalore PU Collee Bangalore 560 056 PAN NO :BDOPN6677E Vs. ITO Ward 3(1)(1) Bangalore APPELLANT RESPONDENT Appellant by : None Respondent by : Sri Subramanian, D.R. Date of Hearing : 03.07.2025 Date of Pronouncement : 26.09.2025 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER: This appeal at the instance of the assessee is directed against the order of the ld. CIT(A)/NFAC dated 6.1.2025 vide DIN & Order No. ITBA/NFAC/S/250/2024-25/1071916875(1) passed u/s. 250 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2018-19. 2. The assessee has raised following grounds of appeal: Printed from counselvise.com ITA No.487/Bang/2025 Thimme Gowda Niriksha Gowda, Bangalore Page 2 of 6 Printed from counselvise.com ITA No.487/Bang/2025 Thimme Gowda Niriksha Gowda, Bangalore Page 3 of 6 3. Brief facts of the case are that as per information received from JAO, the assessee had made cash deposit in Indian Bank amounting to Rs.69,40,000/- however he had not filed any return of income for the AY 2018-19 and accordingly notice u/s 148 of the Act was issued to the assessee. In response to notice u/s 148 of the Act, the assessee filed his return of income on 1.6.2023 declaring total income of Rs.4,97,500/-.Thereafter notices u/s 143(2) as well as 142(1) of the Act were issued. In spite of issuing several notices u/s 142(1) of the Act, reminder letters as well as show cause notice, the assessee had made only part compliance and submitted that assessee had executed some contract/ Architect work for his known parties & the income which he earned from contract/architect work was offered through his income tax return. Further, assessee submitted that the receipt related to contract work has been received in cash and the same has been deposited to his bank account. Further, the assessee submitted that the cash deposited into bank account also includes cash received from his father’s business namely M/s. Anjaneya Fuel Station. The AO however, held that the reply submitted by assessee is not backed by the corroborative documentary evidences with regard to the source of cash deposit. On perusal of the Indian Bank statement, the AO seen that during the impugned year there was total cash deposit to the tune of Rs.1,49,50,000/-. Further, on perusal of the return of income filed in response to the notice u/s 148 of the Act, it was seen that the assessee has shown gross income from other sources to the tune of Rs.19,10,000/- and claimed deduction of Rs.14,12,500/- in arriving at the Net income of Rs.4,97,500/-. Since the assessee has filed the return of income showing gross receipt from other sources to the tune of Rs.19,10,000/-, the balance of cash deposit amounting to Rs.1,30,40,000/- (Rs.1,49,50,000/- - Rs.19,10,000/-) was treated as unexplained cash credit u/s 68 r.w.s. 115BBE of the Act. The AO accordingly Printed from counselvise.com ITA No.487/Bang/2025 Thimme Gowda Niriksha Gowda, Bangalore Page 4 of 6 concluded the assessment proceedings u/s 147 r.w.s. 144 of the Act on a total income of Rs.1,35,37,500/-. 4. Aggrieved by the order of AO passed u/s 147 r.w.s. 144 of the Act, the assessee preferred an appeal before the ld. CIT(A)/NFAC. 5. The ld. CIT(A)/NFAC dismissed the appeal of the assessee by holding that there is no evidence on record to prove that the credit in the accounts are on account of contract receipts. Further, ld. CIT(A)/NFAC noted that the income of the assessee has not suffered any TDS which would not be the case if the assessee was actually deriving contract income and accordingly rejected the proposal of the assessee that income be estimated @ 8% of the turnover. 5.1 Further, the ld. CIT(A)/NFAC noticed that there are frequent debits from the accounts. The total credit in the account was Rs.1,56,70,403/- and the total debits amounting to Rs.1,43,79,648/- and therefore, inferred that the credit in the accounts is related in some way to the debits. Therefore, held that the income can be estimated by following the peak credit method. In the present case, as the peak credit in the bank account was Rs.19,79,857/- as on 11.7.2017 and accordingly held that this amount may be treated as income of the assessee u/s 69A of the Act in place of the income already returned and accordingly partly allowed the appeal of the assessee. 6. Again aggrieved by the order of the ld. CIT(A)/NFAC, the assessee has filed the present appeal before this Tribunal. 7. None appeared on behalf of the assessee. Printed from counselvise.com ITA No.487/Bang/2025 Thimme Gowda Niriksha Gowda, Bangalore Page 5 of 6 8. The ld. D.R. on the other hand supported the order of ld. CIT(A)/NFAC. 9. We have heard the rival submissions and perused the materials available on record. It is an undisputed fact that the assessee had deposited total cash to the tune of Rs.1,49,50,000/- into the Indian Bank account. The AO in absence of corroborative documentary evidence with regard to the source of cash deposit did not accept the contention of the assessee that the sources are cash received from his contract/architect work and the same has been deposited to his bank account. Further, on going through the order of ld. CIT(A)/NFAC, we also take a note of the fact that during the appellate proceedings, despite issuing 4 notices, the assessee did not respond to any of the notices. The ld. CIT(A)/NFAC, accordingly held that as there is no evidence on record to prove that the credit in the accounts are on account of contract receipt, he applied the peak credit method and the peak credit in the bank account as on 11.7.2017 amounting to Rs.19,79,857/- was treated as income of the assessee. As the assessee could not represent his case before the AO, ld. CIT(A)/NFAC as well as even before us and explained the source of cash deposit, we deem it fit and proper to remit the entire issue in dispute to the file of AO to decide afresh in accordance with law. Needless to say, a reasonable opportunity of hearing must be granted to the assessee. The assessee is also directed to produce all the necessary documents/records/ accounts/statements in support of his claim and should not take unnecessary adjournments. We make it clear that in case of further default the assessee shall not be entitled to any leniency. It is ordered accordingly. Printed from counselvise.com ITA No.487/Bang/2025 Thimme Gowda Niriksha Gowda, Bangalore Page 6 of 6 10. In the result, appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 26th Sept, 2025 Sd/- (Prashant Maharishi) Vice President Sd/- (Keshav Dubey) Judicial Member Bangalore, Dated 26th Sept, 2025. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. Printed from counselvise.com "