RAJALINGA RAJA JEGATH JANANI,RAJAPALAYAM vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1, VIRUDHUNAGAR, INCOME TAX OFFICE, VIRUDHUNAGAR

ITA 153/CHNY/2026Status: DisposedITAT Chennai28 September 2026AY 2017-20184 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition of Rs.40,50,000/- made by the AO and confirmed by the Ld. CIT(A) was not justified. The Tribunal noted that the assessee, an individual engaged in the business of purchase and sale of waste cotton under the name Ramathilagam Cotton Traders, had offered Rs.40,50,000/- under the head 'Other Income' in its statement of total income and Profit and Loss Account. These financial statements were available before both the AO and the Ld. CIT(A). The Tribunal found merit in the assessee's argument that if the addition were accepted, the same amount would be taxed twice. Therefore, the Tribunal set aside the order of the Ld. CIT(A) and allowed the grounds raised by the assessee. The operative direction was to delete the addition.

What were the facts?

The assessee, Rajalinga Raja Jegath Janani, filed an appeal against the order of the Ld. Commissioner of Income Tax (Appeal) for Assessment Year 2017-18. The Assessing Officer (AO) had determined the assessee's income at Rs.56,90,530/-, against a returned income of Rs.16,40,530/-. This increase was primarily due to an addition of Rs.40,50,000/- under Section 68 of the Income-tax Act, 1961, on account of cash deposits. The assessee had challenged this addition before the Ld. CIT(A), who confirmed the AO's view. Aggrieved, the assessee is now before the Income Tax Appellate Tribunal (ITAT). The AO's order was dated 19.12.2019, and the Ld. CIT(A)'s order was dated 26.11.2025.

What were the issues?

1. Whether the addition of Rs.40,50,000/- made under Section 68 of the Income-tax Act, 1961, by the AO and confirmed by the Ld. CIT(A) is justified, considering the assessee had already offered this amount as income from other sources (commission received from farmers)? Assessee's Contention: The Ld. AR argued that the AO erred in making an addition under Section 68 when the assessee had already declared the Rs.40,50,000/- as commission received from farmers under the head 'income from other sources'. The assessee contended that this constituted a double addition and that the income was already offered for taxation. The assessee relied on the statement of total income and the trading and profit and loss account. Revenue's Contention: The Ld. DR vehemently opposed the assessee's appeal and relied on the order of the Ld. CIT(A). No specific authorities or precedents were mentioned by the revenue.

Which sections of the Income-tax Act were involved?

Section 68

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

Hearing: 29.07.2026Pronounced: 28.09.2026

PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:

This appeal filed by the assessee is directed against the order dated 26.11.2025 passed by the Ld. Commissioner of Income Tax (Appeal), ADDL/JCIT (A)-1, Surat for the assessment year 2017-18. 2. At the outset, it is noted that the AO determined the income of the assessee at Rs.56,90,530/- against the returned income of Rs.16,40,530/-, inter-alia making an addition under Section 68 of t

The order continues below.

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