UTHUMAN SAHIB SHAJI,KOLLAM V. DCIT, INTERNATIONAL TAXATION, TRIVANDRUM

ITA 221/COCH/2025

AI Insights

The case involves Uthuman Sahib Shaji, a non-resident Indian, who appealed against the final assessment order for the Assessment Year 2022-23, which included additions for unexplained cash deposits and unexplained expenditures based on his income tax return and GST returns. The Dispute Resolution Panel (DRP) initially reduced some additions but also enhanced the addition under long-term capital gains. The Tribunal dismissed the appeal, agreeing with the lower authorities that the additions were justified based on the lack of satisfactory explanation regarding the sources of investments in properties.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711825 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2022-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SURESH SIVANANDAN
• Assessee Lawyers: N.S.RAJAGOPAL
• Keywords: Additional evidence; Unexplained expenditure; Unexplained investment; Capital Gains
• Section: 143(3); 69

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM AND SHRI SONJOY SARMA, JM ITA No. 221/Coch/2025 Assessment Year: 2022-23 Uthuman Sahib Shaji .......... Appellant Mumthazmanzil, 207, Gandhi Nagar Ayathil P.O. Vadakkevial, Kollam 691201 [PAN: EJPPS9359C] vs. DCIT (Internatinal Transaction) .......... Respondent Thiruvananthapuram Appellant by: Shri N.S. Rajagopal, CA Respondent by: Shri Suresh Sivanandan, CIT-DR Date of Hearing: 04.06.2025 Date of Pronouncement: 22.07.2025 O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the final assessment order passed u/s. 143(3) r.w.s. 144C(13) of Income Tax Act, 1961 (hereinafter \"the Act\") dated 23.01.2025 for Assessment Year (AY) 2022-23. 2. The brief facts of the case are that the appellant is non-resident Indian. The return of income for AY 2022-23 was filed on 29.07.2022 declaring income of Rs. 5,23,380/-. Against the said return of income, Printed from counselvise.com 2 ITA No. 221/Coch/2025 Uthuman Sahib Shaji the DCIT (International Taxation), Thiruvanantha-puram (AO) passed draft assessment order u/s. 143C(1) of the Act proposing to make addition on account of cash deposit of Rs. 1,53,64,380/- as unexplained cash deposit. Further based on the information contained in the GST monthly return that the appellant made turnover of Rs. 1,81,67,169/- to make addition of Rs. 1,81,67,169/- as unexplained expenditure. On receipt of the draft assessment order, the appellant had filed objections before the DRP contesting the above addition and on due consideration of the objections the DRP directed the AO to delete the addition on account of unexplained expenditure of Rs. 1,81,67,169/-. However, reduced the addition on account of unexplained cash debit made u/s. 69 of the Act of Rs. 92,64,380/- and further directed the AO to make enhancement of addition of Rs. 10,56,953/- under long term capital gains. 3. On receipt of the directions from the DRP, the AO passed final assessment order u/s. 143(3) r.w.s. 144C(13) of the Act vide order dated 23.01.2025 giving effect to the directions of the DRP. 4. Being aggrieved by the final assessment order the appellant filed appeal before the Tribunal. 5. The contentions raised by the learned counsel for the assessee before us are as under: - i) No addition can be made in the limited scrutiny assessment on issues which are not subject matter of limited scrutiny proceedings. Printed from counselvise.com 3 ITA No. 221/Coch/2025 Uthuman Sahib Shaji ii) The DRP had exceeded in jurisdiction in making enhancement of addition under capital gains of Rs. 10,56,953/-. No addition is warranted u/s. 69 of the Act as a sum of Rs. 23,50,000/- was paid by the appellant’s wife for purchase of property as the same has been directly paid from wife’s account through banking channels. Confirmation letter was also filed. It is further submitted that a sum of Rs. 25,00,000/- was received as loan from one Ms. Priya through banking channel. 6. On the other hand, the ld. CIT-DR, placing reliance on the orders of the lower authorities submitted that no interference is called for. 7. We have heard rival contentions and perused the material available on record. The issue in the present appeal relates to the addition on account of unexplained investment made in purchase of properties. The return was picked up for limited scrutiny assessment in order to verify the source of investment made in purchase of properties, which are extracted by the AO at page No. 2 of the assessment order. During the course of proceedings before the AO the appellant had not filed any details or explanation in support of the source of investment made in immovable properties. During the course proceedings before the DRP the appellant filed an explanation stating that these properties were purchased out of sale proceeds of properties. The DRP, after calling for a remand report reduced the addition to Rs. 92,64,380/-, however, enhanced the Printed from counselvise.com 4 ITA No. 221/Coch/2025 Uthuman Sahib Shaji addition under the head ‘long term capital gains’ by Rs. 10,56,953/-. Before us the appellant filed a bank statement showing receipt of loan from one Ms. Priya and also showed that consideration for purchase of property to the extent of Rs. 23,50,000/- was paid by the wife of the appellant. These information, no doubt, constitute additional evidence and no application for admission of additional evidence was filed before us. Except this no other explanation was given in support of the source of investment in the immovable property. Therefore, we do not find any merit to interfere with the orders passed by the lower authorities. The contention that no addition can be made beyond the items for which limited scrutiny was taken up cannot be accepted in view of the fact that the addition was made by the AO only on account of unexplained investment in immovable property which form part of limited scrutiny. Thus, we do not find any merit in the appeal filed by the assessee. 8. In the result, the appeal filed by the assessee stands dismissed. Order pronounced in the open court on 22nd July, 2025. Sd/- Sd/- (SONJOY SARMA) JUDICIAL MEMBER (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 22nd July, 2025 n.p. Printed from counselvise.com 5 ITA No. 221/Coch/2025 Uthuman Sahib Shaji Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin Printed from counselvise.com "