VEERAMALAICHETTIAR MANI,SALEM V. ITO, WARD-1(3), SALEM

ITA 2152/CHNY/2024

AI Insights

The case revolves around an appeal by Veeramalaichettiar Mani against the order of the CIT(A) which confirmed the addition of Rs.16,74,000 to the assessee's income for the Assessment Year 2017-18. This addition was initially made by the Assessing Officer under section 144 of the Income-tax Act, 1961, due to unexplained cash deposits in the assessee's bank account during the demonetization period. The assessee argued that these deposits were from cash withdrawn from a property sale advance, which was kept for more than seven months before being deposited. The CIT(A) rejected this explanation as improbable, leading to the appeal before the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472186 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P.K. SENTHIL KUMAR
• Assessee Lawyers: T.S. LAKSHMI VENKARAMNAN
• Section: 144

Judgement Text

" आयकर अपीलीय अिधकरण, ‘ए’ \u0011ा यपीठ, चे\u0016ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI \u0019ी एबी टी. वक\u001e, \u0011ा ियक सद! एवं \u0019ी जगदीश, लेखा सद! क े सम( BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.2152/Chny/2024 िनधा9रण वष9 /Assessment Year: 2017-18 Veeramalaichettiar Mani, Old No.3-115, New No.45, Periyar Colony, Dadagapatti Gate, Salem – 636 006 Vs. The Income Tax Officer, Ward-1(3), Salem. [PAN: AGOPK 2743E] (अपीलाथ\u0007/Appellant) (\b\tयथ\u0007/Respondent) अपीलाथ\u001e की ओर से/ Appellant by : Shri T.S. Lakshmi Venkaramnan, FCA HIथ\u001e की ओर से /Respondent by : Shri P.K. Senthil Kumar, Addl. CIT सुनवाई की तारीख/Date of Hearing : 13.11.2024 घोषणा की तारीख /Date of Pronouncement : 31.01.2025 आदेश / O R D E R PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2017-18 arises out of the order of Learned Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi [hereinafter “CIT(A)”] dated 20.10.2023 in the matter of assessment framed by the Assessing Officer [AO] u/s. 144 of the Income-tax Act,1961 (hereinafter “the Act”) on 14.10.2019. ITA No.2152/Chny/2024 :- 2 -: 2. The only effective ground of appeal in this appeal of assessee is against addition of cash deposit in the bank account of Rs.16,74,00/- during demonetization period. 3. The assessee is an individual and has not filed return of income. The assessee has made cash deposit of Rs.16,74,000/- during demonetization period. The assessee during assessment proceeding has explained source of cash deposit as receipt from sale of property on 21.04.2016 and subsequent withdrawal from bank on next day. However, the A.O did not accept the explanation and made the addition. Aggrieved, the assessee filed an appeal before Ld. CIT(A). The Ld. CIT(A) confirmed the addition observing that the explanation that assessee has withdrawn cash and kept for more than seven months fails the test of human probability . 4. The Ld. Authorized Representative (A.R) of the assessee has submitted that the assessee has entered into a sale agreement on 18.04.2016 and received advance of Rs. 20,00,000/- by cheque on 21.04.2016. The assessee subsequently withdrew the entire amount in cash, which was deposited during demonetization period. The Ld. AR has submitted that source of cash deposits made during demonetization period was the amount withdrawn previously. The Ld. ITA No.2152/Chny/2024 :- 3 -: A.R further argued that once the source of the cash deposits was explained, the Ld. CIT(A) was not justified in concluding that it was improbable to have kept the cash for seven months. 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 made the addition of Rs.16,74,000/- for cash deposits made during the demonetization period. The assessee has explained the source of cash deposit as cash withdrawn from the bank account on 22.04.2016 out of Rs. 20,00,000/- received as an advance for the sale of property on 21.04.2016. There is no dispute that the assessee has withdrawn a cash of Rs.20,00,000/- on 22.04.2016. The Ld. CIT(A) has confirmed the addition applying the test of human probability . In our considered view , the Ld CIT(A) was not justified to reject assessee’s explanation , without bringing any material to the effect that cash of Rs 20,00,000 withdrawn seven months back has been utilized somewhere else. We therefore, reverse the order of Ld CIT(A) and delete the addition of Rs.16,74,000/- made by the A.O. ITA No.2152/Chny/2024 :- 4 -: 7. In the result, the appeal filed by the assessee is allowed. Order pronounced on 31st January, 2025. Sd/- Sd/- (एबी टी. वक\u001e) (ABY. T. Varkey) \u0011ाियक सद! / Judicial Member (जगदीश) (Jagadish) लेखा सद! /Accountant Member चे\u0010नई/Chennai, \u0013दनांक/Dated: 31st January, 2025. EDN/- आदेश क\u0016 \bितिल\u0019प अ\u001aे\u0019षत/Copy to: 1. अपीलाथ\b/Appellant 2. \t थ\b/Respondent 3. आयकर आयु\u0010/CIT, Salem 4. िवभागीय \tितिनिध/DR 5. गाड\u0019 फाईल/GF "