KAVITHAK,COIMBATORE vs. NON COOP WARD4(3), COIMBAOTORE

ITA 2258/CHNY/2026Status: DisposedITAT Chennai25 September 2026AY 2020-215 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the matter requires a revisit by the authorities below. Specifically, the Tribunal noted that the Canara Bank statement (Annexure-2), the details of corresponding debit entries in the SBI bank statement against credits reflected in the Canara Bank statement (Annexure-3), and the amount of Rs. 1,08,690/- representing proceeds of a gold loan, for which the source was attempted to be explained and substantiated by the Jewel loan statement and related records (Annexure-6), all require further examination. Consequently, the grounds raised by the assessee were allowed for statistical purposes. The matter was restored back to the file of the Assessing Officer (AO) with a direction to reconsider the assessee's submissions after providing a proper opportunity of being heard. The assessee was directed to provide all relevant explanations and documents to the AO without seeking adjournments. The Tribunal did not decide the issues on merits but remanded them for fresh consideration.

What were the facts?

The assessee, Kavithak, filed an appeal against the order of the Commissioner of Income Tax (Appeals) for Assessment Year 2020-21. The assessee's original return declared an income of Rs. 4,97,870. The case was selected for e-verification due to high cash deposits. A notice under section 148 was issued, and a revised return was filed. The Assessing Officer (AO) made additions amounting to Rs. 73,35,962 under section 69A read with section 115BBE, treating certain bank credits as unexplained money. The CIT(A) dismissed the assessee's appeal. The assessee is aggrieved by this dismissal and has filed the present appeal before the Income Tax Appellate Tribunal (ITAT). The disputed amount is Rs. 73,35,962.

What were the issues?

1. Whether the reassessment proceedings initiated under section 147 are without jurisdiction, based on incorrect appreciation of facts and without proper application of mind, rendering the order bad in law and void ab initio? 2. Whether the Learned CIT(A) erred in upholding the reassessment and additions without properly examining the issues on merits, mechanically upholding the assessment order, and thereby rendering the order arbitrary, unjust, and unsustainable? 3. Whether the Learned CIT(A) erred in confirming the addition of Rs. 72,27,272/- treated as unexplained money under section 69A, without appreciating that a substantial portion represents inter-bank transfers from SBI and customer collections for government payments, which are part of business operations and duly supported by bank statements? 4. Whether the Learned CIT(A) erred in confirming the addition of Rs. 1,08,690/- without appreciating that it represents proceeds from a gold loan, duly supported by documentary evidence? Assessee's Contentions: - The reassessment proceedings are bad in law. - The CIT(A) mechanically upheld the assessment order without proper examination. - The addition of Rs. 72,27,272/- includes inter-bank transfers (Rs. 67,75,000) and customer collections (Rs. 4,52,272, comprising IMPS reversals and customer credits), which are part of regular business and fully traceable. - The addition of Rs. 1,08,690/- is from a gold loan with documentary evidence. - The assessee is in the money transfer business, and bank credits represent gross transactional flow, not taxable income; only commission is taxable. - The addition results in taxing circulating funds multiple times. - Section 69A is not applicable as the source of transactions is explained. - Additions should be restricted to peak credit after considering fund rotation. Revenue's Contentions: - The judgment records no specific arguments for the revenue.

Which sections of the Income-tax Act were involved?

Section 147,Section 69A,Section 115BBE,Section 139(1),Section 250,Section 282

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: 24.08.2026Pronounced: 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 09.02.2026, for the Assessment Year (hereinafter referred to as the ‘AY’) 2020-21. GROUDS OF APPEAL

1.

1 The order passed by the Learned Commissioner of Income Tax (Appeals) under section 250 of t

The order continues below.

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