VENKATACHALAM VIKKRAM ,SALEM V. ITO, WARD 1(4),SALEM, SALEM

ITA 2436/CHNY/2024

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The case involves Venkatachalam Vikram, the proprietor of R.V. Vikram Agencies, who appealed against the order of the Commissioner of Income Tax (Appeals), which confirmed the Assessing Officer's decision to treat a sum of \\u20b911,13,500 as unexplained credit under section 68 of the Income Tax Act, 1961. This amount was deposited in the assessee's account after the cutoff dates for accepting old SBNs (specimen bank notes) for petrol bunks. The assessee argued that the cash deposits were from legitimate sales and that the invalid currencies should not be treated as unexplained income. The Tribunal found that the assessee was not given sufficient opportunity to present his case and thus remanded the matter for a fresh assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 107557 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 21-11-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 18-09-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R.ANITA
• Assessee Lawyers: T.S. LAKSHMI VENKATARAMAN
• Keywords: Unexplained cash credit; Principle of natural justice
• Section: 68; 40(a)(ia)

Judgement Text

"आयकर अपीलीय अिधकरण, ’सी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ एवं ŵी अिमताभ शुƑा, लेखा सद˟ क े समƗ Before Shri S.S. Viswanethra Ravi, Judicial Member & Shri Amitabh Shukla, Accountant Member आयकर अपील सं./I.T.A. No.2436/Chny/2024 िनधाŊरण वषŊ/Assessment Year: 2017-18 Venkatachalam Vikram, No. 1, Prop. R.V. Vikram Agencies, Chinnamariammankovil Street, Kannankurichi, Salem 636 008. [PAN: AEDPV4809H] Vs. The Income Tax Officer, Ward 1(4), Salem. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri T.S. Lakshmi Venkataraman, FCA ŮȑथŎ की ओर से/Respondent by : Ms. R. Anita, Addl. CIT सुनवाई की तारीख/ Date of hearing : 21.11.2024 घोषणा की तारीख /Date of Pronouncement : 27.11.2024 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order dated 28.08.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2017-18. 2. Brief facts of the case are that the assessee is an individual and proprietor of petrol bunk namely M/s. R.V. Vikram Agencies, a dealer of Indian Oil Corporation. The assessee filed his return of income I.T.A. No.2436/Chny/24 2 admitting total income of ₹.3,48,200/-. The Assessing Officer noted at page 2 of the assessment order that the assessee had deposited old SBNs to an extent of ₹.11,13,500/-. The Assessing Officer did not allow the above sum for the reason that the Govt. Of India allowed the petrol bunk to receive the old SBNs of ₹.1000 till 24.11.2016 and ₹.500 till 15.12.2016. Since the assessee received old SBNs after the aforesaid dates, the above said amount of ₹.11,13,500/- was treated as assessee’s unexplained credit and brought to tax under section 68 of the Income Tax Act, 1961 [“Act” in short]. Further, the Assessing Officer also disallowed the interest payment to an extent of ₹.45,936/- under section 40(a)(ia) of the Act. The ld. CIT(A) confirmed the same. 3. The ld. AR Shri T.S. Lakshmi Venkataraman, FCA submits that once the Assessing Officer has not doubted the cash deposits out of sale, the deposit of invalid currencies cannot be treated as unexplained income of the assessee, in as much as, when the currencies itself are invalid, there is no character of income embedded in those currencies to treat them as unexplained income. He further submits that due to the circumstances beyond his control, the assessee could not file explanation/documentary evidence in support of his claim before the ld. CIT(A) and prayed to afford an opportunity to the assessee. I.T.A. No.2436/Chny/24 3 4. The ld. DR Ms. R. Anita, Addl. CIT opposed the same and drew our attention to page 7 & 8 of the impugned order and argues that the ld. CIT(A) has given ample of opportunities to the assessee, but, the assessee failed to upload his explanation to substantiate his claims. 5. After hearing both the parties, considering the facts and circumstances of the case and in the interest of natural justice, we deem it proper to remand the matter to the file of the ld. CIT(A) for fresh consideration by affording an opportunity to the assessee for filing/ uploading his explanation with supporting documents, if any, to substantiate his case and to decide the issue on merits in accordance with law. Thus, the grounds raised by the assessee are allowed for statistical purposes. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 27th November, 2024 at Chennai. Sd/- Sd/- (AMITABH SHUKLA) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 27.11.2024 I.T.A. No.2436/Chny/24 4 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF. "