PENNAGARAM KUPPUSAMY POUNRAJ,DHARMAPURI vs. ITO, CIRCLE-1(1), SALEM

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ITA 3654/CHNY/2025Status: DisposedITAT Chennai09 June 2026AY 2011-126 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee's admission regarding unrecorded marriage expenses offered as income from other sources was valid. Since no evidence was produced to rebut this admission, the addition made by the AO and confirmed by the CIT(A) was upheld.

What were the facts?

The assessee incurred significant marriage expenses for his daughter, which were not fully recorded in his books of account. The Assessing Officer (AO) made additions based on the assessee's own admission of offering the unrecorded expenditure as income from other sources.

What were the issues?

Whether the addition of unrecorded marriage expenses, based on the assessee's admission, is sustainable. Whether the principles of natural justice were violated due to non-supply of a statement recorded during survey.

Which sections of the Income-tax Act were involved?

Section 133A,Section 143(3),Section 69C

AI-generated summary — verify with the full judgment below

Before: Shri Inturi Rama Rao & Shri S.S. Viswanethra Ravi

Hearing: 11.03.2026Pronounced: 09.06.2026

आयकर अपीलीय अिधकरण, ’बी’ �ायपीठ, चे�ई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI �ी इंटूरी रामाराव, लेखा सद� एवं �ी एस.एस. िव�ने� रिव, �ाियक सद� के सम� । Before Shri Inturi Rama Rao, Accountant Member & Shri S.S. Viswanethra Ravi, Judicial Member आयकर अपील सं./I.T.A. No.3654/Chny/2025 िनधा�रण वष�/Assessment Year: 2011-12 Pennagaram Kuppusamy Pounraj, Vs. The Income Tax Officer, 5-A, Railway South Line Road, circle 1(1)Salem, Dharmapuri Fort S.O, Dharmapuri, Tamil Nadu-636007. Tamil Nadu-636701. [PAN: AEOPP4806P] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Mr. S. Sridhar (Erode), Advocate ��थ� की ओर से/Respondent by : Mr. Shiva Srinivas, CIT सुनवाई की तारीख/ Date of hearing : 11.03.2026 घोषणा की तारीख /Date of Pronouncement 09.06.2026 : आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:

This appeal filed by the assessee is directed against the order dated 10.09.2025 passed by the ld. Commissioner of Income Tax (Appeals), Chennai, for the assessment year 2011-12.

2.

We find that this appeal has been filed with a delay of 2 days. The assessee filed an affidavit for condonation of delay stating the reasons. Upon hearing both the parties and on examination of the said affidavit, we find that the reasons stated by the assessee are bona fide, which really prevented the filing of the appeal in time. Thus, the delay is condoned and the appeal is admitted for adjudication.

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3.

The ld. AR, Mr. S. Sridhar, Advocate, submits that the assessee is not interested in contesting Ground Nos. 3 and 4 and prayed to dismiss the same as not pressed. Accordingly, considering the submission of the ld. AR, Ground Nos. 3 and 4 raised by the assessee are dismissed as not pressed.

4.

Ground No. 2 raised by the assessee challenges the action of the CIT(A) in confirming the addition of Rs. 2,38,00,000/- on account of the marriage expenses of his daughter in the facts and circumstances of the case.

5.

The brief facts of the case are that the assessee is an individual engaged in the business of poultry farming and granite business. The assessee filed his return of income declaring a total income of Rs. 77,98,270/- and agricultural income of Rs. 22,50,000/-. The said return was processed under Section 143 of the Income-tax Act, 1961 (for short, ‘the Act’), and thereafter, under scrutiny, the AO, by issuing a notice under Section 143(2), completed the assessment, inter alia, making additions on account of marriage expenses, unexplained expenditure, and unexplained investment, and determined the income of the assessee at Rs.11,28,17,34,81/- under Section 143(3) of the Act. Not being satisfied with the order of the AO, the assessee challenged the same before the ld. CIT(A). Considering the submissions of the assessee, the ld. CIT(A) allowed the appeal in part. Aggrieved by the said order, the assessee is before us.

6.

The ld. AR, Mr. S. Sridhar, Advocate, submits that the statement referred to by the AO, stated to have been recorded under Section 133A, has no evidentiary value and, in the absence of anything concrete about

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the action under Section 133A(5), addition is not sustainable in accordance with the survey manual of the Revenue, and vehemently argued that the assessment made thereon is bad in law. He further submits that the order of the ld. CIT(A) suffers from gross violation of the principles of natural justice, as no copy of the alleged statement stated to have been recorded under Section 133A of the Act was supplied to the assessee. Further, he submits that the ld. CIT(A) had not considered Ground No. 2 in respect of challenging the action under Section 133A(5) of the Act, simply stating that no submission was made, which is not legally sustainable. He further vehemently argued that the action of the AO, which was confirmed by the ld. CIT(A), in calling for information with regard to expenditure incurred on the assessee's daughter's marriage, without giving a finding that such action was taken after the marriage, is against the clear mandate as contemplated in the relevant section, and prayed to quash the consequential assessment order.

7.

The ld. DR, Mr. Shiva Srinivas, CIT, submits that the survey under Section 133A(5) was conducted to ascertain the expenses incurred in connection with the marriage of the assessee’s daughter on 21.08.2010. He referred to para No. 2 of the assessment order and submits that the statement was recorded from the assessee during the course of the survey, and he clearly deposed that he had spent about Rs.2.28 crores for the said marriage. Further, the ld. DR submits that the assessee stated that the said expenditure incurred for the marriage was spent out of drawings from the capital account of M/s. Sathiya Granite, and details of the marriage expenses were also furnished. He argued that the assessee, also confirmed the statement deposed by filing a letter dated 22.09.2010 stating that there was some discrepancy of Rs.10,00,000/-,

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which may be added to the expenditure, making the total expenditure Rs.2.38 crores. The ld. DR referred to the contents of the said letter, which are reproduced on page No. 2 of the assessment order, which clearly show that the assessee incurred the marriage expenses out of funds, not recorded in the books of account. He referred to para No. 5.5 of the impugned order and submitted that the ld. CIT(A) rightly confirmed the order of the AO in adding the marriage expenses, which were agreed to by the assessee during the assessment proceedings. The ld. DR relied upon para Nos. 5.5 to 5.5.2 of the impugned order and prayed to dismiss Ground No. 2 raised by the assessee.

8.

Heard both parties and perused the material available on record. We note that the assessee performed his daughter’s marriage on 21.08.2010. A statement of the assessee was recorded to ascertain the expenses incurred in connection with the marriage of his daughter under Section 133A(5) of the Act. We find that the assessee deposed that he incurred expenditure of Rs.2.28 crores for the marriage, which was from the drawings from his capital account of M/s. Sathiya Granite. Thereafter, a letter dated 22.09.2010 was filed stating that there was some discrepancy of Rs.10,00,000/-, which may be added to the expenditure, making the total expenditure Rs.2.38 crores. We find that the contents of the said letter, which are reproduced on page No. 2 of the assessment order, state that an expenditure of Rs.2.19 crores spent on the marriage was not recorded in the books of account and that the same was offered as income from other sources. Further, he offered a total sum of Rs.2.34 crores over and above his normal business income in the said letter. The relevant portion is as under:-

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“As for the marriage expenses I have submitted the details of payments for Rs.19 Lakhs and the balance Rs.2.19 Crores has been spent out of funds not recorded in the books of accounts which I offer as income from other sources of the current financial year. I am also offering an amount of Rs.15 Lakhs on account of omissions due to accounting of expenditure/gifts: The total of all the above works out to Rs.2.34 Crores which I would like to offer as my income from other sources over and above my normal business income.”

The AO examined the same and held that, since the above said amount was not recorded in the books of account and on the admission made by the assessee, the same was added as unexplained expenditure under Section 69(C) of the Act. On perusal of the impugned order from para Nos. 5.5 to 5.5.2, we note that the ld. CIT(A) clearly recorded that there was no evidence brought on record rebutting the statement made vide letter dated 22.09.2010. Further, the ld. CIT(A) recorded that the assessee could not furnish the ledger account of the assessee in the books of M/s. Sathiya Granite and M/s. PKP Poultry Farm, as the Tally system had crashed and no backup was available. Before us, the ld. AR argued that the addition made by the AO, which was confirmed by the ld. CIT(A), is not legally tenable, as the statement stated to have been recorded by the AO was not supplied to the assessee despite making a request in 2014 itself. Further, we find that his contention is that when the statement was not supplied to the assessee and when it is not on record, the assessment made by adding the marriage expenses is not sustainable. We find no force in the arguments of the ld. AR in this regard, as we discussed above that the assessee himself agreed before the AO that the amount of Rs.2.34 crores was offered as his income from other sources over and above his normal business income, specifically stating that the said expenditure was incurred out of funds not recorded in the books of account. Further, there was no evidence brought on record before the ld. CIT(A) rebutting the said admission, nor before the ITAT as

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well. Thus, the arguments of the ld. AR praying to treat the assessment as not legally tenable are rejected. Therefore, we completely agree with the reasons recorded by the ld. CIT(A) vide para Nos. 5.5 to 5.5.2 of the impugned order, and Ground No. 2 raised by the assessee fails and is dismissed.

In the result, the appeal filed by the assessee is dismissed

Order pronounced on 9th June, 2026 at Chennai.

Sd/- Sd/- (INTURI RAMA RAO) (S.S. VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER Chennai, Dated, 09.06.2026 MM/- आदेश की �ितिलिप अ�ेिषत/Copy to: 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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