EMPEROR TIMBER TRADER PVT. LTD.,CHENNAI vs. ITO, CORPORATE WARD-2(1), CHENNAI

आदेश / O R D E R

PER MANU KUMAR GIRI, JM:

The captioned appeal filed by the Assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi, [CIT(A)] dated 30.09.2026 for Assessment Year 2017-18. 2. Brief facts of the case are that the assessee filed its return of income for the Assessment Year 2017-18 declaring total income of Rs.20,39,930/-. As per the information available on record, the assessee had made cash deposits aggregating to Rs.26,90,000/- in

ITA No 3596/Chny/2025 (AY 2017-18) Emperor Timber Trader Pvt Ltd. Vs ITO, W 2(1) :: 2 :: its bank account during the demonetisation period from 09.11.2016 to 30.12.2016. The assessment was completed under section 143(3) of the Income-tax Act, 1961 ("the Act") on 27.12.2019 determining the total income at Rs.47,29,930/- as against the returned income of Rs.20,39,930/- by making an addition of Rs.26,90,000/- under section 69A of the Act and subjecting the same to tax under section 115BBE of the Act. 3. Aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A), contending that the Assessing Officer was not justified in treating the cash deposits of Rs.26,90,000/- as unexplained money under section 69A of the Act and in levying tax thereon under section 115BBE of the Act. However, the learned CIT(A), vide order dated 30.09.2026, dismissed the appeal and confirmed the addition made by the Assessing Officer, observing that the assessee remained non- compliant despite repeated opportunities afforded during the appellate proceedings. 4. Before us, the ld. Authorised Representative (AR) submitted that the assessee could not effectively comply with the notices issued by the authorities below and was therefore unable to furnish the relevant documents in support of its claim. It was submitted that the notices were not properly acknowledged by the assessee and consequently were not handed over to the auditor for necessary compliance, resulting in inadvertent non-prosecution of the proceedings. The ld. Authorised Representative further submitted that the assessee is now in possession of the requisite books of account, cash book, bank statements and other supporting evidences and prayed that one more opportunity may be granted to substantiate the explanation regarding the impugned cash deposits.

ITA No 3596/Chny/2025 (AY 2017-18) Emperor Timber Trader Pvt Ltd. Vs ITO, W 2(1) :: 3 :: 5. Per contra, the ld. Departmental Representative (DR) supported the orders of the lower authorities and submitted that adequate opportunities had already been afforded to the assessee at both stages and, therefore, no further indulgence was warranted. 6. We have heard the rival submissions and perused the material available on record. We find that the Assessing Officer made an addition of Rs.26,90,000/- under section 69A of the Act in respect of cash deposits made during the demonetisation period and subjected the same to tax under section 115BBE of the Act. We further find that the ld. CIT(A) confirmed the addition primarily on account of non-compliance by the assessee and without the benefit of examining the evidences which, according to the assessee, are available to explain the source of the cash deposits. 7. It is a settled proposition of law that an assessment should ordinarily be made on the basis of relevant evidence and that an opportunity should be afforded to the assessee to place all material facts on record. Since the impugned addition relates to cash deposits made during the demonetisation period and the assessee has now expressed its willingness to furnish books of account and supporting evidence, we are of the considered view that the ends of justice would be met by affording one more opportunity to the assessee to substantiate its claim. 8. Considering the entirety of the facts and circumstances of the case and in the interest of substantial justice, we set aside the order of the learned CIT(A) and restore the matter to the file of the Assessing Officer for fresh adjudication. The Assessing Officer may examine the books of account, cash book, bank statements and such other evidences as may be produced by the assessee in support of the cash deposits of Rs.26,90,000/- and thereafter

ITA No 3596/Chny/2025 (AY 2017-18) Emperor Timber Trader Pvt Ltd. Vs ITO, W 2(1) :: 4 :: decide the issue afresh in accordance with law after affording reasonable opportunity of being heard to the assessee. While deciding the AO will also take into consideration of co-ordinate bench order in the case of TASMAC at ITA No.431/Chny/2023 dated 07.10.2024. 9. We make it clear that the assessee shall fully cooperate in the remand proceedings and shall promptly furnish all details and documents called for by the Assessing Officer. Failure to do so shall entitle the Assessing Officer to proceed in accordance with law on the basis of the material available on record. 10. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on the 08th day of June 2026, in

Sd/- Sd/- (प�ावती एस) (मनु कुमार िग#र) (PADMAVATHY S) (MANU KUMAR GIRI) लेखा सद$या/ACCOUNTANT MEMBER %या�यक सद$य/JUDICIAL MEMBER

चे%नई/Chennai, 'दनांक/Dated: 08th June, 2026. SNDP, Sr. PS

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