THANKAPPAN RAJENDRAN,MOOLACHEL ALUVILAI, KANYAKUMARI vs. INCOME TAX OFFICER, WARD-3, NAGERCOIL, INCOME TAX OFFICE, NAGERCOIL

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ITA 3271/CHNY/2025Status: DisposedITAT Chennai08 September 2026AY 2017-20185 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the First Appellate Authority (FAA) had not properly examined the documentary evidence submitted by the assessee regarding his wife's income disclosure. Therefore, the issue was restored to the Assessing Officer (AO) for fresh examination.

What were the facts?

The assessee's income was enhanced by Rs. 40,46,744/- under Section 69 for unexplained investment. The assessee claimed this amount belonged to his wife and was disclosed in her income. The lower authorities confirmed the addition without properly examining the evidence.

What were the issues?

Whether the addition made under Section 69 was justified when the assessee provided evidence that the amount was disclosed in his wife's income. Whether the FAA properly considered the documentary evidence submitted by the assessee.

Which sections of the Income-tax Act were involved?

Section 69,Section 143(3),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI GEORGE GEORGE K & SHRI S.R. RAGHUNATHA

Hearing: 03.09.2026Pronounced: 08.09.2026

आदेश/ O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 19.09.2025 passed under section

ITA No.3271/CHNY/2025 - 2 - Thankappan Rajendran 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2017-18.

2.

Brief facts of the case are as follows: The assessee is an individual. For the assessment year 2017-18, the assessee filed his return of income on 17.01.2018 declaring total income of Rs.4,30,490/-. The case was selected for limited scrutiny on the issues of “high value cash withdrawal during the year and large cash deposits in bank accounts during the year”. Accordingly, notices u/s.143(2) and 142(1) of the Act were issued, in response to which the assessee furnished the requisite submissions. The assessment was completed u/s.143(3) of the Act determining the total income at Rs.44,77,234/- after making an addition of Rs.40,46,744/- u/s.69 of the Act towards unexplained investment.

3.

Aggrieved by the assessment order, the assessee preferred an appeal before the First Appellate Authority (FAA). The FAA confirmed the addition made by the AO, observing that the assessee had neither furnished any additional evidence nor discharged the burden of proof cast upon him u/s.69 of the Act.

ITA No.3271/CHNY/2025 - 3 - Thankappan Rajendran 4. Aggrieved, the assessee is in appeal before the Tribunal. The Ld. AR submitted that the assessee had furnished before the FAA the relevant documentary evidence in support of his explanation regarding the addition of Rs.40,46,744/- made u/s.69 of the Act. However, the FAA merely observed that no additional evidence had been furnished and, without properly considering the documents already placed on record, confirmed the addition. The Ld. AR submitted that the assessee had specifically explained that Rajendra Herbal Medical Stores, Thuckalay, belonged to his wife, Smt. Nadesan Kasithangam Kala, PAN: ALEPK5973F, and that the said business was carried on by her in her individual capacity. In support of this contention, the assessee had furnished before the FAA copies of her Profit & Loss Account, computation of income and Income-tax return acknowledgement. It was further submitted that the amount of Rs.40,46,744/- had been disclosed by the assessee’s wife in her return of income and computation statement in respect of the said business. The Ld. AR, therefore, submitted that the amount in question does not pertain to the assessee and could not be treated as unexplained investment in his hands. Since the documentary evidence furnished before the FAA, including the disclosure of the said amount in the income and computation statement of the assessee’s wife, has not been properly examined, the Ld. AR prayed

ITA No.3271/CHNY/2025 - 4 - Thankappan Rajendran that the matter may be restored to the file of the AO for fresh examination.

5.

The Ld.DR supported the orders of the AO and the FAA.

6.

We have heard the rival submissions and perused the material available on record. The grievance of the assessee is that the documentary evidence furnished before the FAA was not properly considered while confirming the addition of Rs.40,46,744/- made u/s.69 of the Act. We find that the assessee had furnished copies of the Profit & Loss Account, computation of income and Income-tax return acknowledgement of his wife, Smt. Nadesan Kasithangam Kala (PAN : ALEPK5973F) to substantiate his contention that the business of Rajendra Herbal Medical Stores, Thuckalay, belonged to her and was being carried on by her in her individual capacity. It is also the specific contention of the assessee that the amount of Rs.40,46,744/- in question had been disclosed by his wife in her return of income and computation statement. However, we find that the FAA has not properly examined or adjudicated upon the aforesaid documentary evidence and has merely observed that no additional evidence was furnished. In our considered view, the contention of the assessee that the amount in question had already been disclosed in the hands

ITA No.3271/CHNY/2025 - 5 - Thankappan Rajendran of his wife requires verification with reference to her return of income, computation and other relevant records. In the interest of justice, we deem it appropriate to restore the issue to the file of the AO for fresh examination. The AO shall verify the contention of the assessee that the amount of Rs.40,46,744/- had already been disclosed by his wife and offered to tax in her hands and thereafter adjudicate the issue in accordance with law, after affording reasonable opportunity of being heard to the assessee. It is ordered accordingly.

7.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 8th September,2026 at Chennai.

Sd/- Sd/- (एस.आर. रघुनाथा) (जॉज� जॉज� के) (S.R. RAGHUNATHA) (GEORGE GEORGE K) लेखा सद�य/ACCOUNTANT MEMBER उपा�य� /VICE PRESIDENT चे�नई/Chennai, �दनांक/Dated, the 8th September, 2026 RSR, Sr.PS आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त /CIT, Madurai 4. �वभागीय ��त�न�ध/DR 5. गाड� फाईल/GF. By Order Digitally signed by REKHA REKHA SENTHIL RAJ SENTHIL RAJ Date: 2026.09.10 11:11:16 +05'30'

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