ULLATTIL SILLU,KOZHIKODE V. ITO, WARD 1(4), KOZHIKODE

ITA 131/COCH/2025

AI Insights

The case involves Ullattil Sillu, the appellant, who contested an addition of Rs.2,42,000 to his income for the assessment year 2017-2018, which was deemed unexplained money by the Assessing Officer (AO). The addition was based on cash deposits made during the demonetization period. The appellant argued that these deposits were from a withdrawal made earlier in the same year, which the AO rejected due to the time gap between withdrawal and deposit. The Commissioner of Income-tax (Appeals) dismissed the appeal ex parte, leading to the current appeal before the Income Tax Appellate Tribunal. The Tribunal found the appellant's explanation credible and in accordance with the relevant CBDT circular, thus allowing the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 33542 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL; SENIOR
• Assessee Lawyers: P. RAGHUNATHAN
• Keywords: Condonation of delay

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, COCHIN Before Shri Inturi Rama Rao, Accountant Member ITA No.131/Coch/2025 : Asst.Year 2017-2018 Ullattil Sillu 1245/19 Pillakkatu House Chalappuram PO Calicut – 673 002. PAN : BQYPS2276M. v. The Income Tax Officer Ward 1(4) Kozhikode. (Appellant) (Respondent) Appellant by : Sri.P.Raghunathan, Advocate Respondent by : Smt.Leena Lal, Senior AR Date of Hearing : 13.03.2025 Date of Pronouncement :27.03.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Assessment Centre / Commissioner of Income- tax (Appeals) [“CIT(A)” for short] dated 18.03.2024 for the assessment years 2017-2018. 2. Briefly the facts of the case are that the appellant is an individual. The return of income for the assessment year 2017-2018 was filed on 28th February, 2018 disclosing an income of Rs.2,83,130. Against the said return of income, the assessment was completed by the Assessing Officer (“the AO” hereinafter) vide order dated 25.11.2019 passed u/s.143(3) of the Income-tax Act, 1961 (“the Act” hereinafter). While doing so, the AO made an addition of Rs.2,42,000 being cash deposits made during the demonetization period as unexplained money. Without accepting the explanation of the appellant that the said cash deposit was ITA No.131/Coch/2025. Ullattil Sillu. 2 made out of amount withdrawn on 5th August, 2016 amounting to Rs.3,03,000. The A.O. was of the opinion that the amount was deposited after a gap of 106 days and therefore it cannot be accepted. Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order, dismissed the appeal ex parte. 3. Being aggrieved, the appellant is in appeal before me in the present appeal. At the outset, there is a delay of 267 days in filing the present appeal before the Tribunal. The appellant had filed an affidavit seeking condonation of delay, stating therein that the delay occurred as no order was served physical on the appellant nor the order was served through email address given in Form 35 nor any alert was received on the mobile regarding the notice u/s.250 of the Act. It is only when the appellant was served the show cause notice u/s.271AAC(1) on 28.01.2025 on checking the website of the Income Tax Portal the appellant had noticed the order was passed by the CIT(A) on 18th March, 2024. Thus, it is submitted that the delay is occurred which is neither intentional nor deliberate. Therefore, it is submitted that the delay may be condoned. 4. On the other hand, the learned Sr.DR vehemently opposed the condonation of delay and submits that there is no sufficient cause exists. 5. Having heard the rival submissions and in the absence of material on record contrary to the averments made in the affidavit seeking the condonation of delay, I am of the considered view that it is a fit case to condone the delay. Accordingly, I condone the delay and admit the appeal for adjudication on merits. ITA No.131/Coch/2025. Ullattil Sillu. 3 6. I heard the rival submissions and perused the material available on record. The only issue that arises for my consideration is whether there was justification to sustain the addition of Rs.2,42,000 being the cash deposit made during the demonetization period as unexplained money of the appellant. On mere perusal of the assessment order, it would be clear that the appellant had tendered an explanation that the cash deposits were made out of the earlier withdrawal made from bank account on 5th August, 2016 of Rs.3,03,000. This fact was not disputed by the AO. The A.O. merely rejected the explanation by holding that there was a time gap between the cash withdrawal from the bank and its deposit in the bank account. It is settled position of law that in the absence of evidence to show that the amount withdrawn was utilized somewhere else, the amount withdrawn should be deemed to be available for subsequent deposit in bank account. Moreover, in view of the CBDT Circular No.3 of 2017 dated 20th January, 2017, the cash deposit is below 2,50,000 during the demonetization period need no further verification. Hence, I am of the considered opinion that no addition is warranted in the present case. 7. In the result, the appeal filed by the assessee is allowed. Order pronounced on this 27th day of March, 2025. Sd/- (Inturi Rama Rao) ACCOUNTANT MEMBER Cochin; Dated : 27th March, 2025. Devadas G* ITA No.131/Coch/2025. Ullattil Sillu. 4 Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT, Cochin. 4. The DR, ITAT, Cochin. 5. Guard File. Asst.Registrar/ITAT, Cochin "