PURUSHOTHAMAN KRISHNASAMY,CUDDALORE vs. INCOME TAX OFFICER WARD 1 CUDDALORE, CUDDALORE

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ITA 469/CHNY/2026Status: DisposedITAT Chennai21 July 2026AY 2012-133 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that since the assessee had no other source of income, the credits in the bank account represented business receipts. It directed the AO to tax the difference at the same presumptive rate of 8% as business income.

What were the facts?

The assessee declared income on a presumptive basis from operating earthmovers. The Assessing Officer (AO) noticed significant cash deposits and other credits in the assessee's bank account exceeding the declared receipts. The AO treated the difference as undisclosed income under Section 68.

What were the issues?

Whether the difference between bank credits and declared presumptive income can be treated as undisclosed income under Section 68, and if so, at what rate should it be taxed.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI GEORGE GEORGE K & MS. PADMAVATHY.S

For Respondent: Mr. Christopher Vasanth, Sr. AR

आदेश / O R D E R

PER PADMAVATHY.S, A.M: This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals), Addl./JCIT(A), Mysore (in short "FAA") passed u/s. 250 of the Income Tax Act, 1961 (in short "the Act") dated 28.11.2025 for Assessment Year (AY) 2012-13.

2.

The assessee is an individual and earns income by operating earthmover for levelling of agricultural land and deepening the ponds. The

ITA No.469/Chny/2026 Purushothaman Krishnasamy :- 2 -:

assessee filed a return of income for AY 2012-13 on 11.01.2023 declaring total income of Rs.3,90,000/- out of gross receipts of Rs. 44,75,000/- on presumptive basis @ 8%. The AO noticed that the assessee has during the year under consideration deposited cash to the tune of Rs. 28,83,130/- and is having other credits of Rs.34,31,853/- in the savings bank account held with Axis Bank. Since the receipts considered for the purpose of filing the return of income is lower than the credits in the bank account, the A.O treated the difference of Rs. 18,39,983/- as addition u/s. 68 of the Act. Aggrieved, the assessee filed further appeal before the CIT(A). Since the assessee did not respond to the notice by the CIT(A), the appeal was dismissed by the CIT(A) ex-parte. The assessee is in appeal before the Tribunal against the order of the CIT(A).

3.

We have heard the parties, and perused the material available on record. The Ld. Authorized Representative (AR) of the assessee submitted that the assessee is in the business of giving earthmover on hiring basis and has accordingly declared the income on presumptive basis @ 8%. The Ld. AR further submitted that the assessee does not have any other source of income and therefore treating the difference in the amounts credited to the bank account and the gross receipts declared as undisclosed income is not correct. From the perusal of the order of the A.O, we notice that the said fact that the assessee has no source of income other than hiring charges is admitted by the AO in the order and accordingly there is merit in the submission that the entire amount of difference cannot be added u/s. 68 of the Act. Further, the credits in the bank account are receipts towards the business income of the assessee since it is an admitted fact that the assessee does not have any other income. Considering that the assessee has offered the income

ITA No.469/Chny/2026 Purushothaman Krishnasamy :- 3 -:

on presumptive basis @ 8%, we are of the considered view that it would be fair and just for the differential receipt from the business of the assessee also to be taxed @ 8%. Accordingly, we direct the A.O to restrict the addition to 8% of the difference amount of Rs.18,39,983/- treating the same as the business income of the assessee.

4.

In the result, the appeal of the assessee is partly allowed.

Order pronounced on 21st day of July, 2026 at Chennai.

Sd/- Sd/- (जॉज� जॉज� के) (पदमावती यस) (Padmavathy.S) (George George K) उपा�� / Vice President लेखा लेखा सद�य लेखा लेखा सद�य सद�य /Accountant Member सद�य चे�नई/Chennai, �दनांक/Dated: 21st July, 2026. EDN, Sr. P.S EJTADA Digitally signed by EJTADA DURGA NARESH DURGA आदेश क� �ितिल�प अ�े�षत/Copy to: Date: 2026.07.22 NARESH 17:04:32 +05'30' 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकर आयु�/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय �ितिनिध/DR 5. गाड� फाईल/GF

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