CHANDRAKUMARI,CHENNAI vs. ITO NON CORPORATE WARD -3(1), CHENNAI

Brief facts of the case are that the assessee has filed her return of income for the assessment year 2017-18 on 29.07.2017 admitting total income of ₹.5,54,720/- and the same was processed under section 143(1) of the Income Tax Act, 1961 [“Act” in short]. Thereafter, the case was selected for complete scrutiny. By considering the submissions of the assessee against statutory notices, the Assessing Officer has completed the assessment under section 143(3) of the Act dated 03.12.2019 assessing total income of the assessee at ₹.26,84,000/- by making addition under section 69A of the Act towards unexplained cash deposit of ₹.25,60,000/- during the course of demonetization period. On appeal, the ld. CIT(A) confirmed the addition.

On further appeal before the Tribunal, vide order dated 14.07.2023, the disallowance was sustained to the extent of ₹.7,60,000/- against the addition of ₹.25,60,000/- and the disallowance should have been restricted to the tune of ₹.18,00,000/-, whereas, due to typographic error, it was mentioned as ₹.15,00,000/-. Thus, the ld. Counsel for the assessee prayed for rectifying the disallowance restricted by the Tribunal.

On the other hand, the ld. DR has not opposed the above submissions of the ld. Counsel.

Heard both the sides, perused the appeal order dated 14.07.2023, wherein, the Tribunal as observed and held as under: 5. Heard both the sides, perused the materials available on record and gone through the orders of authorities below. On verification of the details furnished by the assessee, the Assessing Officer has noted that the assessee has made cash deposit of ₹.25.6 lakhs during 1011.2016 to 18.11.2016. Since the assessee could not substantiate the source for the above cash deposits with documentary evidence, the Assessing Officer treated the cash deposit of ₹.25,60,000/- as unexplained money under section 69A of the Act, which was confirmed by the ld. CIT(A).

The case of the assessee is that the assessee owns agricultural land (punjai land) to the extent of 3.91 hectares and earned agricultural income by carrying out agricultural operations of cultivating mango, coconut, groundnut, paddy, timber, etc. The assessee has also earned income from TV serial story writing since 2014 onwards. The assessee has been regularly filing the returns of income by declaring the above source of incomes, which are duly accepted by the Department in earlier assessment years. In the year under consideration, the assessee has submitted that the income earned by the assessee were retained in cash towards purchase of agricultural inputs such as seeds, fertilizers, pesticides, weedicides, power and irrigation, sale of agricultural produce besides receipt of money for writing story for TV serials and deposited ₹.25.6 lakhs from 10.11.2016 to 02.12.2016. The assessee has no other source other than the above incomes earned by her. It is also an admitted fact that similar agricultural income and other income declared in the assessment years 2015-16 & 2016-17 are not in dispute. Since the assessee has produced copy of patta and crop adangal of agricultural land owned by her to the extent of 3.91 hectares, the agricultural income earned by the assessee are also not in dispute. The department also not disputed the income earned by way of TV serial story writing for which any documentary evidence can be produced. Considering the above facts and circumstances of the case, in the interest of natural justice, the Assessing Officer is directed to restrict the disallowance to the extent of ₹.15.00 lakhs and the balance amount of ₹.7,60,000/- shall be treated as unexplained money under section 69A of the Act. 6. On perusal of the above findings of the Tribunal, it is apparent that there is a typographical error in the appeal order passed by the Tribunal dated 14.07.2023, wherein, the Tribunal has sustained the disallowance to the extent of ₹.7,60,000/- treating as unexplained money under section 69A of the Income Tax Act, 1961 [“Act” in short] against the disallowance of ₹.25,60,000/-. Therefore, the disallowance to be restricted should be ₹.18,00,000/- instead of mentioning as ₹.15,00,000/- in the appeal order. Accordingly, it is held that the Assessing Officer is directed to restrict the disallowance to the extent of ₹.18,00,000/- and the balance amount of ₹.7,60,000/- shall be treated as unexplained money under section 69A of the Act.

In the result, the appeal filed by the assessee is partly allowed.