KRISHNARAJ,COIMBATORE vs. DCIT, NCC-4, COIMBATORE

ITA 2687/CHNY/2025Status: DisposedITAT Chennai07 October 2026AY 2015-164 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the AO made an addition based on available departmental information and a partial reply from the assessee, which was confirmed by the CIT(A) due to the assessee's non-participation. The Tribunal observed that the assessee showed an increase in capital due to giving 18,000 grams of gold to Krishnanjana Jewellers during the impugned assessment year, with an invoice raised by the jeweller for unregistered dealer purchase for business, along with the actual sale of gold to Sabari Jewellers. This transaction was shown as a deemed sale by the assessee. The Tribunal found that the transactions related to capital gain needed verification with documentary evidence, which the AO had not appreciated. To meet the ends of justice, the Tribunal set aside the order of the CIT(A) and remitted the matter back to the file of the AO to frame the assessment denovo, after providing a reasonable opportunity to the assessee. The assessee was directed to be diligent and file necessary details and documents. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, a Hindu Undivided Family (HUF), filed its return of income for Assessment Year 2015-16 on 01.12.2015, declaring a total income of Rs.1,34,40,883/-. The initial assessment under Section 143(3) of the Income Tax Act, 1961, was completed on 27.06.2017, accepting the returned income. Subsequently, the Principal Commissioner of Income Tax (PCIT) found the assessment order prejudicial to the interest of revenue and set it aside under Section 263 of the Act on 30.01.2020, directing a fresh assessment. The Assessing Officer (AO) completed the reassessment on 15.04.2021 under Section 143(3) read with Section 263, making an addition of Rs.3,79,70,855/- as unexplained cash credits under Section 68, leading to a total income of Rs.5,14,11,740/-. The assessee appealed to the Commissioner of Income Tax (Appeals) (CIT(A)), who dismissed the appeal on 22.09.2025 due to the assessee's non-participation despite multiple opportunities.

What were the issues?

1. Whether the addition of Rs.3,79,70,855/- as unexplained cash credits under Section 68 of the Income Tax Act, 1961, is justified, considering the incremental increase in capital during the assessment year. The assessee argued that the NFAC (CIT(A)) erred in confirming the addition of Rs.3,79,70,855/-, representing the disputed value of the incremental increase in capital, as unexplained credit under Section 68 without proper reasons. The assessee's representative prayed for the setting aside of the CIT(A)'s order and remittance of the issue to the AO for effective completion of assessment, assuring participation before the AO. The revenue contended that both the AO and CIT(A) provided sufficient opportunities, but the assessee was negligent in responding to notices, and therefore, prayed for confirmation of the CIT(A)'s order.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 263,Section 68

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

Hearing: 10.08.2026Pronounced: 07.10.2026

PER S. R. RAGHUNATHA, AM :

The present appeal is filed by the assessee against the order dated 22.09.2025 passed by the learned Commissioner of Income Tax (Appeals), NFAC, Delhi (hereinafter referred to as “ld.CIT(A)”), dismissing the appeal filed by the assessee against the assessment order dated 15.04.2021 passed u/s.143(3) r.w.s 263 of the Income Tax Act, 1961 (hereinafter referred to as the “Ac

The order continues below.

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