MANI DURAISAMY,REDHILLS vs. COMMISSIONER OF INCOME TAX (APPEALS), FACELESS, CHENNAI

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ITA 2955/CHNY/2025Status: DisposedITAT Chennai23 June 2026AY 2018-195 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had sufficiently explained the cash deposits from cash withdrawals, cash gifts from brothers, and income from real estate business. The AO's addition was based on irrelevant considerations.

What were the facts?

The assessee did not file an income tax return for AY 2018-19. The case was re-opened due to significant cash deposits and stock market transactions. The Assessing Officer (AO) treated a portion of the cash deposits as unexplained.

What were the issues?

Whether the CIT(A) was justified in upholding the addition of unexplained cash deposits made by the assessee.

Which sections of the Income-tax Act were involved?

Section 147,Section 148

AI-generated summary — verify with the full judgment below

Before: Shri M. Balaganesh

Hearing: 22.06.2026Pronounced: 23.06.2026

आयकर अपीलीय अिधकरण, ‘‘सी’’ �ायपीठ, चे�ई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI �ी ऐम. बालगनेश, लेखा सद� के सम� Before Shri M. Balaganesh, Accountant Member आयकर अपील सं./I.T.A. No.2955/Chny/2025 िनधा�रण वष�/Assessment Year: 2018-19 Mani Duraisamy, Vs. The CIT(Appeals), NO.36, Pillaiyar Kovil Street, Faceless, Chennai, Redhills, Chennai, 600034. Tamil Nadu-600052. [PAN: AKQPM4548P] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Mr. G. Tarun, Advocate ��थ� की ओर से/Respondent by : Ms. N. Abhinaya, JCIT सुनवाई की तारीख/ Date of hearing : 22.06.2026 घोषणा की तारीख /Date of Pronouncement : 23.06.2026 आदेश /O R D E R PER M. BALAGANESH, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the order dated 29.08.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2018-19. 2. The only issue to be decided in this appeal is whether the ld. CIT(A) was justified in upholding the addition of ₹46,65,300/- in the facts and circumstances of the instant case. 3. I have heard the rival submissions and perused the material available on record. The assessee is an individual who had not filed his return of income for the Assessment Year 2018-19. The case of the assessee was sought to be re-opened under Section 147 of the Income

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Tax Act, 1961 (for the sake of brevity, ‘the Act’) vide issuance of notice under Section 148 of the Act dated 13.03.2022 for the reason that the assessee had made cash deposits in the bank account in the sum of ₹52,95,500/- and also had made transactions in the National Stock Exchange amounting to ₹4,31,55,786/-, sale of equity shares for an amount of ₹47,832/-, and sale of futures and derivatives to the extent of ₹2,48,45,88,588/-. Return of income was furnished by the assessee in response to the notice issued under Section 148 of the Act declaring a loss of ₹7,36,650/-.

4.

Ld. AO, during the course of re-assessment proceedings, sought to examine the sources of cash deposits made by the assessee. The assessee explained the source of income as under:-

No. Particulars Amount 1. Out of cash withdrawals made during the 13,58,600/- year 2. Jewel Loan 6,30,200/- 3. Cash gift from brothers 12,00,000/ 4. Cash receipts from real estate business duly 21,06,700/- offered to tax Total 52,95,500/-

5.

Ld. AO accepted the jewel loan of ₹6,30,200/- as explained. The remaining sum of ₹46,65,300/- was treated as unexplained money, and the same was added in the assessment. This action of the ld. AO was upheld by the ld. CIT(A). 6. In respect of cash withdrawals made by the assessee during the year under consideration, totalling ₹13,58,600/-, it is not the case of the

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Revenue that the said withdrawals had been utilized by the assessee for his business purposes or for some personal purposes, and that the same was not available as a cash source for explaining the cash deposits made in the bank account. This onus is clearly on the Revenue, which had not been discharged in the instant case. Hence, the explanation given by the assessee that the cash deposits were made out of cash withdrawals needs to be accepted and, accordingly, I hold that the sum of ₹13,58,600/- is indeed available as a cash source for explaining the cash deposits 7. With regard to the cash gifts received of ₹12,00,000/- by the assessee from four brothers (₹3,00,000/- each), the assessee had enclosed confirmations from all the four brothers, which are enclosed at pages 49 to 52 of the paper-book. In the said confirmations, the brothers had indeed duly confirmed the fact of giving cash gifts of ₹3,00,000/- each to the assessee out of natural love and affection. The said confirmations also contain the details of the income-tax assessment particulars of the brothers together with their PANs. No inquiry whatsoever was sought to be made by the Revenue pursuant to the filing of these confirmations by the assessee. Instead, the ld. AO states in his assessment order that the assessee had not furnished the bank statements of the brothers to prove the cash gifts given by them. This, in my considered opinion, is totally irrelevant, as what is required for giving a cash gift is only the availability of cash balance as per the books of the donor (i.e., the brothers) and not the bank statements. Hence, the explanation of the assessee has been dismissed by the Revenue totally on an irrelevant consideration. The assessee had discharged his onus by furnishing the confirmations for the cash gifts. Hence, the said explanation is treated as explained.

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8.

With regard to the remaining sum of ₹21,06,700/- representing income from the real estate business of the assessee, I find that the assessee had duly offered the same as income by crediting it to the profit and loss account. Ultimately, the returned income was a loss, as is evident from the profit and loss account and computation of income. This income has been accepted by the Revenue. Hence, the cash emanating out of the business income of the assessee in the sum of ₹21,06,700/- cannot be disbelieved, and the same is to be treated as explained.

9.

Accordingly, I hold that the entire addition of ₹46,65,300/- on account of cash deposits has been properly explained by the assessee in the instant case. Hence, there is no question of making any addition thereon by treating it as unexplained. Accordingly, the grounds raised by the assessee are allowed.

10.

In the result, the appeal filed by the assessee is allowed.

Order pronounced on 23rd June, 2026 at Chennai.

Sd/- (M. BALAGANESH) ACCOUNTANT MEMBER

Chennai, Dated, 23.06.2026 MM/- आदेश की �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant, 2.��थ�/ Respondent,

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3.

आयकर आयु�/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय �ितिनिध/DR & 5. गाड� फाईल/GF.

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