PERUMAL MURUGAN,THENI vs. ITO, WARD-1(2), THENI

ITA 2725/CHNY/2025Status: DisposedITAT Chennai25 September 2026AY 2023-244 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the cash withdrawals representing cash loaded into ATM machines were explained by the assessee through a service agreement, commission schedules, and profit & loss statement, which the AO found satisfactory. Regarding cash deposits of Rs. 15,26,100/-, the Tribunal noted that the assessee claimed agricultural sales (Rs. 9,75,000/-), a jewel loan (Rs. 2,97,500/-), and gifts (Rs. 4,00,000/-). The AO accepted the jewel loan and partly considered agricultural income. However, the gift component of Rs. 4,00,000/- was unsubstantiated due to lack of gift deeds, affidavits, or donor identity proof. The CIT(A) had allowed 50% of the gift amount. The Tribunal, considering the documents filed by the assessee, found that the CIT(A) rightly pointed out the lack of supporting evidence for gifts and applied the benefit of doubt to consider 50% as genuine. For agricultural income, the Tribunal observed that the assessee's balance sheet showed land holding of Rs. 28.96 lakhs, and Rs. 9.75 lakhs could not be claimed as gross income. After considering expenses of Rs. 5.42 lakhs, only a net amount of Rs. 4.33 lakhs could be considered for income and deposits. Therefore, the Tribunal found no infirmity in the CIT(A)'s order and sustained it. The grounds raised by the assessee were dismissed.

What were the facts?

The assessee, Perumal Murugan, filed an appeal against the order of the CIT(A) for Assessment Year 2023-24. The assessee declared a total income of Rs. 3,82,020/-. The case was selected for scrutiny due to significant cash withdrawals (Rs. 55,97,80,000/-) and deposits (Rs. 15,26,100/-). The Assessing Officer (AO) made an addition of Rs. 7.95 lakhs under Section 69A read with Section 115BBE. The CIT(A) partly allowed the appeal. The assessee's primary contention was that the AO and CIT(A) failed to consider evidence regarding agricultural income and other submissions. The assessee also argued that the return was filed under Section 139(1) and not in response to a notice under Section 148. The CIT(A) had accepted 50% of the gift amount as genuine and sustained the balance addition.

What were the issues?

1. Whether the Tribunal had to decide if the AO and CIT(A) failed to consider the assessee's details of land holdings, patta chitta, and other records regarding agricultural income, as argued by the assessee. The assessee contended that these documents were furnished before the AO and appellate authorities, and the appellate authorities failed to note them, despite the assessee earning agricultural income year after year, reflected in earlier returns. The revenue did not record specific arguments on this point. 2. Whether the Tribunal had to decide if the CIT(A) failed to follow principles of natural justice by not obtaining a remand report or setting aside the assessment if they doubted the evidence of agricultural income, as argued by the assessee. The assessee argued that the appellate authorities should have verified the non-furnishing of evidence. The revenue did not record specific arguments on this point. 3. Whether the Tribunal had to decide if the CIT(A) erred in invoking Section 115BBE by treating unexplained income based on wrong facts, as argued by the assessee. The assessee contended that the appellate authorities failed to call for records from the AO and did not appreciate the written submissions. The revenue did not record specific arguments on this point. 4. Whether the Tribunal had to decide if the CIT(A) erred in not deleting the addition in full concerning gifts received at the time of a puberty ceremony, as argued by the assessee. The assessee argued that the authorities accepted the gifts as traditional in nature. The revenue did not record specific arguments on this point.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: HONOURABLE GEORGE GEORGE K & SHRI GAGAN GOYAL

Hearing: 20.08.2026Pronounced: 25.09.2026

PER GAGAN GOYAL, AM: This is an appeal preferred by the assessee against the order of Ld. Commissioner of Income Tax (A) / NFAC, (hereinafter referred as the ‘Ld. CIT(A)’), Delhi dated 22.07.2025 for the Assessment Year (hereinafter referred as the ‘AY’) 2023-24. GROUDS OF APPEAL

1.

The order of the learned appellate authority is opposed to law on the facts and circumstances of the case.

The order continues below.

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