B. BASHEERAHAMED & BROS,VILLUPURAM vs. ACIT, VILLUPURAM CIRCLE,

आयकरअपील�यअ�धकरण ’बी’ �यायपीठ,चे�नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI �ी इंतूरी रामा राव लेखासद� एवं �ी मनु कुमार िग�र, �ाियक सद� BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI MANU KUMAR GIRI, JUDICIAL MEMBER

आयकर अपील सं./ITA No. 3537/Chny/2026 �नधा�रण वष�/Assessment Year: 2017-18 B. Basheerahamed & Bros, v. The ACIT, 159, Main Road Vikravandi, Villupuram Circle, Villupuram-605652, Villpuram, Tamil Nadu-605652 [PAN: AAAFB 0420 D] (Appellant) (Respondent)

अपीलाथ� क� ओर से/ Appellant by : Ms. Suga Bhusini, Advocate !यथ� क� ओर से /Respondent by : Mr. Banoth Akhil Ram Naik, JCIT सुनवाई क� तार�ख/Date of Hearing : 18.08.2026 घोषणा क� तार�ख /Date of : 08.09.2026 Pronouncement आदेश / O R D E R PER MANU KUMAR GIRI, JM:

The captioned appeal filed by the assessee is directed against the order passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as "the Ld. CIT(A)"], dated 30.04.2026 confirming the assessment order passed u/s. 143(3) of the Income Tax Act, 1961 ("the Act"), for the Assessment Year ("AY") 2017-18.

ITA No. 3537/Chny/2026 (AY 2017-18) B. Basheerahamed & Bros Vs ACIT :: 2 :: 2. Brief facts of the case are that the assessee is a partnership firm engaged in the business of trading and processing of paddy and rice. The assessee filed its return of income for the Assessment Year 2017-18 electronically on 21.08.2018 declaring taxable income of Rs.84,86,710/-. The tax liability declared in the return was Rs.26,22,393/-, which was stated to have been discharged by way of advance tax of Rs.26,96,600/- and TDS of Rs.14,640/-. The return of income was processed under section 143(1) of the Income-tax Act, 1961 (“the Act”). Subsequently, a search was conducted in the case of the assessee. During the course of search, excess cash of Rs.11,43,000/- and excess stock of paddy valued at Rs.61,71,000/- were found. Thereafter, notice under section 153A of the Act was issued to the assessee. Notices under sections 143(2) and 142(1) of the Act were also issued calling for various details. The assessee appeared before the Assessing Officer (“AO”) on various dates and furnished the details called for. The AO thereafter completed the assessment under section 143(3) of the Act vide order dated 28.12.2018. While completing the assessment, the AO treated the amount representing the excess cash and excess stock as unexplained/concealed income under sections 68 and 69 of the Act and subjected the same to tax under section 115BBE of the Act. Consequently, an additional tax liability of Rs.73,77,661/- was determined. The contention of the assessee before the lower authorities, as well as before us, is that the excess stock and excess cash were generated in the normal course of its business of trading and processing of paddy and rice. According to the assessee, the income arising from the same was duly offered to tax under the head “Profits and Gains of Business or Profession”. It is the

ITA No. 3537/Chny/2026 (AY 2017-18) B. Basheerahamed & Bros Vs ACIT :: 3 :: grievance of the assessee that the AO, instead of treating the same as business income, invoked the provisions of sections 68/69 of the Act and consequently applied the provisions of section 115BBE of the Act by taxing the amount at the higher rate. The assessee has further contended that, during the course of search, apart from the excess cash of Rs.11,43,000/-, the entire cash balance available with the assessee, including the book cash balance of Rs.23,16,600/-, was seized by the Department. It is stated that the assessee was informed that the seized cash had been remitted/appropriated against its PAN, but the corresponding credit was not granted to the assessee as advance tax/payment towards the tax liability for Assessment Year 2017-18. 3. We have heard the rival submissions and perused the material available on record. The issues raised by the assessee require examination both on facts and in law. The assessee has specifically contended that the excess cash and excess stock found during the course of search were relatable to its regular business activities and, therefore, the resultant income ought to have been assessed under the normal provisions applicable to business income rather than being treated as unexplained income under sections 68/69 of the Act and subjected to the provisions of section 115BBE. 4. We also note that the assessee has raised a specific claim with regard to the seizure of cash amounting to Rs.23,16,600/-, which, according to the assessee, included the excess cash of Rs.11,43,000/- as well as the book cash balance. The assessee has claimed that the seized cash was subsequently remitted/appropriated against its PAN, but corresponding credit was

ITA No. 3537/Chny/2026 (AY 2017-18) B. Basheerahamed & Bros Vs ACIT :: 4 :: not granted against the advance tax liability for the relevant assessment year. 5. In our considered opinion, the aforesaid issues require proper factual verification and a reasoned adjudication by the first appellate authority for the reason that the appellate proceedings was conducted during Covid-19 pandemic. In particular, it is necessary to examine the books of account, stock records, cash book, seized material, statements recorded during the course of search, the manner in which the excess stock and cash were accounted for, and the basis on which the assessee claims that such amounts represented business income. Similarly, the claim regarding seizure of cash and its alleged adjustment/remittance against the assessee's PAN is a factual matter which requires verification from the assessment records, search/seizure records and the relevant tax payment/credit records. It is also relevant that the determination of the correct head and nature of income and the consequential applicability of section 115BBE are matters which ought to be adjudicated after considering the complete factual matrix and the evidence placed on record. 6. We find that, in the interest of substantial justice, the issues raised by the assessee should be examined afresh by the learned CIT(A) rather than being decided merely on the basis of the existing record without proper verification of the aforesaid factual aspects. Accordingly, the impugned order of the learned CIT(A) is set aside and the matter is restored to the file of the learned CIT(A) for de novo adjudication. The learned CIT(A) shall afford adequate and reasonable opportunity of being heard to the assessee and the Assessing Officer. The assessee shall be at liberty to furnish all

ITA No. 3537/Chny/2026 (AY 2017-18) B. Basheerahamed & Bros Vs ACIT :: 5 :: relevant documentary evidence in support of its claims, including books of account, cash book, stock register, purchase and sales records, details of tax payments and relevant documents concerning the cash seized during the course of search. The learned CIT(A) shall thereafter adjudicate the issues afresh by passing a speaking and reasoned order in accordance with law, without being influenced by any observations made in the present order. Needless to say, the Assessing Officer/Department shall also be given adequate opportunity to examine and rebut the evidence, if any, furnished by the assessee. Since the matter is being restored to the file of the learned CIT(A) for fresh adjudication, we refrain from expressing any opinion on the merits of the rival contentions. All the issues are left open for adjudication by the learned CIT(A) in accordance with law. The assessee is directed to cooperate with the appellate proceedings and furnish the requisite details/evidence within the time allowed by the learned CIT(A). 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on the 08th day of September, 2026 in Chennai.

Sd/- Sd/- (इंतूरी रामा राव) (मनु कुमार िग�र) (INTURI RAMA RAO) (MANU KUMAR GIRI) लेखा सद*य/ACCOUNTANT MEMBER �या�यक सद*य/JUDICIAL MEMBER चे�नई/Chennai, +दनांक/Dated: 08th September 2026. SNDP, Sr. PS

ITA No. 3537/Chny/2026 (AY 2017-18) B. Basheerahamed & Bros Vs ACIT :: 6 :: आदेश क� �त,ल-प अ.े-षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF Digitally signed by SANDEEP SANDEE KUMAR P KUMAR Date: 2026.09.11 12:52:22 +05'30'