VIJAYAN SAHADEVAN,ALAPPUZHA V. THE DCIT CIRCLE INTL. TXN , THIRUVANANTHAPURAM

ITITA 18/COCH/2025

AI Insights

The case revolves around the appeal by Vijayan Sahadevan against the Final Assessment Order passed under Section 147 read with Section 144 of the Income Tax Act, 1961, concerning the Assessment Year 2015-2016. The primary contention was the addition of INR 4,00,000 to the Assessee's income, which was alleged to be unexplained cash deposit. The Assessee argued that this amount was derived from agricultural income, which was not adequately considered by the lower authorities. The Tribunal, after examining the evidence and the cash flow statement provided by the Assessee, concluded that the source of the deposit was legitimate and related to agricultural activities, thus allowing the appeal and deleting the addition.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 774072 (ITAT-COCHIN)
• Duration Of Justice: 1 month(s) 23 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 22-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 30-07-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASSESSEE
• Keywords: Condonation of delay; Reasonable cause; Reassessment proceedings; Wrong claim; Application of stay
• Section: 147; 148; 144

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “DB” BENCH, COCHIN SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER IT(IT)A No. 18/COCH/2025 (Assessment Year:2015-2016) & S.A. No. 77/COCH/2025 (Assessment Year:2015-2016) Vijayan Sahadevan Mutteputhuval House, Mangalam P.O., Aratthupuzha, Alappuzha- 690515 [PAN: DTSPS6695P] …………. Appellant The Deputy Commissioner of Income Tax Circle International Taxation O/o the ACIT, DCIT Circle Intl. Txn Aayakar Bhavan, First Floor, Kowdiar P.O. Thiruvananthapuram - 695003 Vs …………. Respondent Appearance For the Appellant/Assessee For the Respondent/Department : : Shri Suresh Kumar Varma Shri Sanjit Kumar Das Date Conclusion of hearing Pronouncement of order : : 20.08.2025 22.09.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member: 1. The present appeal is directed against the Final Assessment Order, dated 15/01/2025, passed under Section 147 read with Section 144 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’], as per directions, dated 11/12/2024, issued by the Dispute Resolution Panel-2, Bengaluru (hereinafter referred to as ‘the DRP’) under Section 144C(1) of the Act for the Assessment Year 2015-2016. Assessee has also filed Stay Application No.77/Coch/2025 in IT(IT)A No.18/Coch/2025 on 20/08/2025. Printed from counselvise.com IT(IT)A No.18/COCH/2025 SA No. 77/COCH/2025 Assessment Year 2015-2016 2 2. The above appeal was accompanied by application seeking condonation of delay of 119 days in filing the present appeal. The delay in filing the appeal was on account of the fact that the Assessee was not using the registered email address after becoming non-resident in the subsequent years. The Assessee acquired delayed knowledge of the Assessment Order having been passed only on receiving the notice of penalty proceeding. Thereafter, some time was spent in deliberating the decision to opt for settlement of tax dispute under Vivaad Se Vishwas Scheme. However, due of communication gap between the Assessee and the tax consultant, the aforesaid scheme ended. Thereafter, steps were taken to get the appeal filed. The aforesaid submissions were supported by sworn affidavit of the Assessee. There is nothing on record to doubt the bonafides of the explanation offered by the Assessee. Taking into consideration the facts of the present case and explanation offered by the Assessee we condone the delay of 119 days in filing the present appeal since we are of the view that the Assessee had reasonable cause for not presenting the appeal within the prescribed time. Accordingly, we proceed to adjudicate the following grounds raised by the Assessee in the present appeal. “1. The Order u/s 147 r.w.s.144 of the Learned DCIT Circle, Intl. Taxn. vide DIN ITBA/AST/S/147/2024-25/1072390034(1)] dated 15.01.2025 for A.Y.2015-16 is opposed to law, facts and circumstances of the case. 2. The Hon'ble Dispute Resolution Panel (DRP) has gone wrong in sustaining the assessing officers' non-consideration of granting of adequate opportunity including personal hearing with reference to notice u/s 148A(b) of the Income tax act, and had this been given the Appellant could have produced the evidence of Rs.50 Lac of Time Deposit which was later acknowledged as explained during the assessment proceedings. 3. The Hon'ble Dispute Resolution Panel (DRP) vide Para-2.1 of its' Order has sustained the wrong claim of jurisdiction of the assessing officer with regard to issue of notice u/s 148 and Printed from counselvise.com IT(IT)A No.18/COCH/2025 SA No. 77/COCH/2025 Assessment Year 2015-2016 3 later assessing escaped income of Rs.4 Lac, which is below the limits of Rs.50 Lac for re-opening cases for more than three years and hence the consequent direction by DRP and the assessment is illegal and not justified. 4. Without prejudice, the Hon'ble DRP ought to have considered that the alleged cash deposits amounting to Rs.4,00,000/-has arose out of agricultural activities and sale of some standing crops thereby proving its nature and source as explained then and there without attracting the provisions u/s 69A and hence the directions and assessment of such cash deposits become Illegal and unjustified. For these and other grounds that may be urged at the time of hearing, the appellant humbly prays that the Hon'ble Income Tax Appellate Tribunal, Cochin Bench, may kindly be pleased to allow the appellants' claim of cash deposits as explained without attracting the provisions u/s 69A, which is disallowed in the assessment order, consequent to the directions of Hon'ble DRP-2, Bengaluru u/s 144(5) and allow the appeal and render justice.” IT(IT)A No.18/Coch/2025 3. The relevant facts in brief are that the Assessee is a residential individual. For the Assessment Year 2015-16, the Assessee did not file the return of income. The Assessing Officer had information that the Assessee had time deposits of INR.50,00,000/- and cash deposit of INR 4,00,000/- with the bank. Therefore, reassessment proceedings were initiated in the case of the Assessee. During the course of hearing the Assessee explained that the Assessee had deposited cash of INR.4,00,000/- into his NRO Savings Account Number 50236 of South Indian Bank, Nangiarkulangara on 24/03/2015. Vide Letter, dated 10/11/2023, the Assessee explained that the cash deposits were sourced from the agricultural income earned from the ancestral land. Vide notice, dated 02/01/2024, the Assessee was asked to furnish cash flow statement for the period 01/04/2014 to 31/03/2015. Since the Assessee failed to furnish the same, addition of INR.4,00,000/- was made in the hands of the Assessee under Section 69A of the Act for the Assessment Year 2015-16 in the Draft Assessment Order, dated 11/03/2024, The Printed from counselvise.com IT(IT)A No.18/COCH/2025 SA No. 77/COCH/2025 Assessment Year 2015-2016 4 Assessee filed objection before the DRP challenging the initiation of the reassessment proceedings as well as the proposed addition of INR 4,00,000/-. Vide order dated 11/12/2024, the DRP rejected the objection raised by the Assessee. Therefore the Assessing Officer passed the Assessment Order, dated 15/01/2025 under Section 147 read with Section 144 of the Act making the addition of INR.4,00,000/- in the hands of the Assessee. Being aggrieved the Assessee has preferred the present appeal challenging the aforesaid addition of INR.4,00,000/-. 4. We have heard both the sides and have perused the relevant material on record. We find that the Assessee has been able to establish source of deposit of INR 4,00,000/- in the bank account as being income earned from sale of agriculture produce. The Assessee has filed cash flow statement showing income receipt from the sale of coconut and the expenses incurred in relation to the same. The summary of the cash flow statement is under: VIJAYAN SAHADEVAN-PAN-DTSPS6695P CASH FLOW STATEMENT – 2014-15 Month Particulars Inflow Outflow Balance Opening cash 4,800.00 APR Sale of Coconut 9,820.00 14,620.00 Expenses of manuring and sale of coconut 7,800.00 6,820.00 JUN Sale of Coconut 7,460.00 14,280.00 Expenses for land reclamation and sale of coconut 5,815.00 8,465.00 AUG Sale of Coconut 8,730.00 17,195.00 Expenses for procuring and sale of coconut 6,340.00 10,855.00 OCT Sale of Coconut 9,610.00 20,465.00 Expenses for procuring and sale of coconut 6,930.00 13,535.00 DEC Sale of Coconut 8,760.00 22,295.00 Expenses for procuring and sale of coconut 6,470.00 15,825.00 FEB Sale of Coconut 9,420.00 25,245.00 Expenses for procuring and sale of coconut 6,980.00 18,265.00 MAR Sale of Standing Trees-Spontaneous growth of Mango trees, Teak, Manjium, Mahagani etc. 387,200.00 405,465.00 Cash Deposit to SIB on 24.03.2015 4,00,000.00 5,465.00 CASH IN HAND 5,465.00 5. The stand taken by the Assessee is supported by the fact that the Revenue has not disputed the stand taken by the Assessee that the Assessee owned ancestors agricultural land. We find that the Printed from counselvise.com IT(IT)A No.18/COCH/2025 SA No. 77/COCH/2025 Assessment Year 2015-2016 5 Assessee had placed on record receipt of payment tax of issued by Land Revenue Department, Kerala Government to corroborate the same. 6. In view of the above, finding merits in the case of the Assessee, we deleted the addition of INR 4,00,000/- made in the hands of the Assessee. Accordingly, Ground No. 4 raised by the Assessee is allowed while all the other grounds are dismissed as having been rendered infructuous. 7. In result, in terms of paragraph 6 above, the appeal preferred by the Assessee [IT(TP)A No. 18/COCH/2025] is allowed. STAY Application No.77/Coch/2025 8. Since we have allowed the appeal preferred by the Assessee, the Stay Application [S.A. No.77/COCH/2025] is dismissed as having rendered as infructuous. Order pronounced on 22.09.2025. Sd/- (Inturi Rama Rao) Accountant Member Sd/- (Rahul Chaudhary) Judicial Member मुंबई Mumbai; Ǒदनांक Dated :22.09.2025 Disha Raut, Stenographer Printed from counselvise.com IT(IT)A No.18/COCH/2025 SA No. 77/COCH/2025 Assessment Year 2015-2016 6 आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. आयकर आयुÈत/ The CIT 4. Ĥधान आयकर आयुÈत / Pr.CIT 5. ͪवभागीय ĤǓतǓनͬध ,आयकर अपीलȣय अͬधकरण ,मुंबई / DR, ITAT, Mumbai 6. गाड[ फाईल / Guard file. आदेशानुसार/ BY ORDER, स×याͪपत ĤǓत //True Copy// उप/सहायक पंजीकार /(Dy./Asstt. Registrar) आयकर अपीलȣय अͬधकरण, मुंबई / ITAT, Mumbai Printed from counselvise.com "