ANUJA RAJESH BALAJI ,CHENNAI vs. ITO , CORPORATE WARD 1 (2) , CHENNAI

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 30.04.2022 relevant to the assessment year 2009-10.

Brief facts of the case are that the assessee is an individual, filed the return of income for the assessment year 2009-10 on 22.02.2010 for declaring a total income of ₹.9,75,235/-. After following due procedures, assessment was completed under section 143(3) of the Income Tax Act, 1961 [“Act” in short] dated 28.12.2011 by accepting the returned income. Since there was an escapement of income on the basis of information received by the Department that the assessee would have received a sum of ₹.1,00,00,000/- from one Shri Amar Lakhi through NRE remittance. Besides, the Assessing Officer found that the assessee has made cash deposits to the extent of ₹.11,75,000/- with the HDFC bank, the assessment was reopened and issued notice under section 148 of the Act. After considering the submissions of the assessee and following due procedures, the assessment under section 143(3) r.w.s. 147 of the Act dated 29.12.2016 was completed by assessing total income of the assessee at ₹.1,22,62,426/- after making additions towards undisclosed cash deposit of ₹.11,75,400/- and unexplained credit under section 68 of the Act at ₹.1,00,00,000/-. On appeal, besides deleting the addition of ₹.1,00,00,000/-, the ld. CIT(A) granted relief to the extent of ₹.5,75,400/- and confirmation the addition to the extent of ₹.6,00,000/- against the addition of ₹.11,75,000/- made by the Assessing Officer.

On being aggrieved, the assessee is in appeal before the Tribunal against confirmation of addition to the extent of ₹.6,00,000/-. The ld. Counsel for the assessee has submitted that the assessee was earning income out of sale of second hand car in cash and the Department has not doubted/rejected the cash incomes reflected in the cash book and trading account of the assessee. It was further submission that the assessee has produced cash receipt for sale of car and sale confirmation and receipt of car along with FC documents and prayed for deleting the addition confirmed by the ld. CIT(A).

On the other hand, the ld. DR strongly supported the order passed by the ld. CIT(A).

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. During the course of appellate proceedings, the assessee has submitted before the ld. CIT(A) that the assessee made cash sales amounting to ₹.17,05,600/-, sold car for ₹.4,20,000/- in cash, earned income from agriculture of ₹.11,450 and rental income of ₹.90,000/-, which were reflected in the cash book and trading account of the assessee. It was further submissions before the ld. CIT(A) that the cash sum deposited in the bank at the end of the year was ₹.12,60,400/- as disclosed in the cash book. An amount of ₹.11,75,400/- from the above mentioned earnings was deposited in HDFC bank. After considering the submissions of the assessee, the ld. CIT(A) restricted the addition to ₹.6,00,000/- by granting relief of ₹.5,75,400/-. Before us, the ld. Counsel for the assessee has submitted that the assessee has produced cash receipt for sale of car and sale confirmation and receipt of car along with FC documents. Considering the plea of the ld. Counsel for the assessee, as the assessee’s transaction was in cash and the earning of the income in cash was not doubted/rejected by the Department, we are of the considered opinion to grant relief of 50% of ₹.6,00,000/- restricted by the ld. CIT(A). Accordingly, the addition is sustained only to the extent of ₹.3,00,000/-.

In the result, the appeal filed by the assessee is partly allowed. Order pronounced on 22nd February, 2023 at Chennai.