MARAPPA GOUNDAR SUBRAMANI,KARUR vs. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2, COIMBATORE, COIMBATORE

ITSSA 3/CHNY/2025Status: DisposedITAT Chennai18 February 2026AY 2015-167 pages
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What were the facts?

The assessee, Marappa Goundar Subramani, filed appeals against the orders of the CIT(A) for Assessment Years 2015-16, 2016-17, and 2017-18. The appeals were filed with a delay of 332 days, which the Tribunal condoned. A search and seizure operation under Section 132 of the Income Tax Act, 1961, was conducted on the assessee on September 21, 2017. Subsequently, notices under Section 153A were issued. The Assessing Officer (AO) completed assessments under Section 153A read with Section 143(3) on September 27, 2021, making additions for unsubstantiated agricultural income and capital gains under Section 45(2). The assessee's appeals to the CIT(A) were partly allowed. The assessee then filed appeals before the ITAT, seeking to admit additional evidence related to agricultural income.

What did the Tribunal hold?

The Tribunal admitted the additional evidence filed by the assessee, finding it necessary for substantial justice and going to the root of the matter. The Tribunal noted that the assessee could not file documentary evidence during assessment proceedings due to the Covid-19 pandemic. Consequently, the Tribunal set aside the impugned orders concerning the issue of agricultural income and restored them to the file of the Assessing Officer (AO) for a fresh hearing on merits. The AO was directed to afford a proper opportunity of hearing to the assessee and to pass fresh assessments in accordance with the law after the assessee substantiates its case with all relevant material and documents. A cost of Rs. 5,000/- per case was imposed on the assessee, to be deposited with the Tamil Nadu State Legal Services Authority. Regarding the issue relating to Section 45(2), the Tribunal held that no interference was required with the CIT(A)'s order. The appeals were allowed for statistical purposes.

What were the issues?

The Tribunal had to decide the following issues: 1. Whether the CIT(A) erred in upholding the addition of agricultural income by disbelieving the assessee's claim and ignoring the existence of coconut trees, and whether the assessment was made on an aspect without incriminating material, relying on the judgment in PCIT vs. Abhisar Buildwell Pvt Ltd (Question of law and mixed law and fact, concerning Section 132 and Section 153A). 2. Whether the CIT(A) erred in holding that there was a conversion of a capital asset into stock-in-trade under Section 45(2), leading to two short-term capital gains (Question of law and mixed law and fact, concerning Section 45(2)). 3. Whether the CIT(A) erred in upholding the assessment without waiting for a valuation report, ignoring the exclusion of time spent on valuation under Section 153B (Question of law and mixed law and fact, concerning Section 153B). Assessee's Contentions: - The CIT(A) erred in relying on PCIT vs. Abhisar Buildwell Pvt Ltd to scrutinize agricultural income without material. - The addition of agricultural income was erroneous as it ignored the existence of coconut trees and the assessee's claim. - The CIT(A) erred in holding a conversion of capital asset to stock-in-trade under Section 45(2). - The assessment was upheld without waiting for a valuation report, contrary to Section 153B. - The assessee sought to admit additional evidence regarding land holdings, sale deeds, patta, adangal, and aerial photographs to substantiate agricultural income, citing the Covid-19 pandemic as a reason for not producing them earlier. Revenue's Contentions: - The Revenue vehemently opposed the admission of additional evidence and pleaded for the dismissal of the appeals.

Which sections of the Income-tax Act were involved?

Section 132,Section 153A,Section 143(3),Section 45(2),Section 153B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI

Before: SHRI MANU KUMAR GIRI & SHRI S.R.RAGHUNATHA

For Respondent: Mr. Shiva Srinivas, CIT
Hearing: 25.11.2025Pronounced: 18.02.2026

PER MANU KUMAR GIRI, JM:

This captioned Appeals filed by the Assessee are directed against the orders of the Ld. Commissioner of Income Tax, Appeals, Chennai [CIT(A)], Chennai all dated 15.02.2024 for Assessment Years 2015-16, 2016-17 & 2017-18. 2. In all captioned appeals, the registry has noted that there is a delay of 332 days in filing the captioned appeals. We have gone through the captioned condonation petition along

The order continues below.

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