JEEVA,TIRUPUR vs. ITO, CIRCLE 1, , TIRUPUR

आयकर अपीलीय अिधकरण, ‘ए’ ायपीठ, चेई।
IN THE INCOME TAX APPELLATE TRIBUNAL
‘A’ BENCH: CHENNAI
ीमनुकुमार िग र, ाियकसद! एवंी जगदीश, लेखा सद! के सम'
BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER

आयकर अपील सं./ITA No.2167/Chny/2025
िनधा9रण वष9 /Assessment Year: 2017-18

Jeeva,
8/4087-A, Propx. Jeeva Garments,
Ayyappa Nagar, Pooluvapatti Post,
Tirupur – 641 602. PAN: AEMPJ 0095A

Vs.
The Income Tax Officer,
Circle-1,
Tirupur.

(अपीलाथ/Appellant)

( यथ/Respondent)

अपीलाथF की ओर से/ Appellant by :
Shri S. Sridhar, Advocate (Erode)
(By virtual)
HIथF की ओर से /Respondent by :
Ms. Pryati Sharma, JCIT

सुनवाई की तारीख/Date of Hearing
:
28.10.2025
घोषणा की तारीख /Date of Pronouncement
:
13.11.2025

आदेश / O R D E R

PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2017-18 arises out of the order of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 15.07.2025 in the matter of assessment framed by the Assessing Officer [AO] u/s. 143(3) of the Income-tax Act, 1961 (hereinafter “the Act”) dated 18.12.2019. Jeeva

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that the ledger account received from the said party did not reflect any cash payments. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A). However, the Ld. CIT(A) dismissed the appeal.
3. The Ld. Authorized Representative (A.R) of the assessee submitted that the case was selected for limited scrutiny to verify the cash deposits in the bank account, and the assessee had duly explained the source of such deposits through the books of account as the source of cash deposit has been sale receipt and duly offered for tax. However, the A.O exceeded the scope of limited scrutiny by making additions u/s. 68 of the Act in respect of cash receipts arising out of sales made to M/s. Eastman Exports Global Clothing, Tirupur, and M/s. Future Lifestyle Fashions Ltd., Bangalore. The Ld. A.R contended that the A.O made the addition under section 68 without confronting the assessee with the ledger account received from M/s.
Eastman Exports Global Clothing, Tirupur. Similarly, the addition of Rs.10,00,000/- relating to M/s. Future Lifestyle Fashions Ltd.,
Bangalore, was made merely on the ground that the said party did not furnish a confirmation. The Ld. A.R submitted that the assessee had a turnover of Rs. 8,17,09,789 /- including the two parties in respect of which addition has been made and the income has been duly offered
Jeeva

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as per books of account. Therefore, when the A.O had accepted the turnover and books of account, making an addition of the sale amount under section 68 of the Act was not justified. In support of these contentions, the Ld. A.R relied on the decision of the Hon’ble Gujarat
High Court in CIT v. Vishal Exports Overseas Ltd. in Tax Appeal No.
2471 of 2009, dated 03.07.2012. 4. On the other hand, the Ld. Departmental Representative (D.R) relied on the orders of the lower authorities.
5. We have heard the rival submissions and perused the materials available on record. The assessee is engaged in the business of garment export and has reported a turnover of Rs. 8,17,09,789/-. The case was selected for limited scrutiny under CASS to verify large cash deposits in the bank account. The A.O has made additions in respect of cash receipts of Rs.10,00,000/- from M/s. Future Lifestyle Fashions
Ltd., Bangalore, recorded in the cash book on the ground that the above party has not responded to the notice issued to submit the ledger account of the assessee in their books of account. Similarly the A.O made addition of Rs 45,00,000 /- in respect of cash receipt shown from sale to M/s. Eastman Exports Global Clothing, Tirupur, as the ledger account submitted by the party does not show cash payment of Jeeva

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Rs.45,00,000/-. The A.O has made the addition without confronting the assessee with the ledger account received from M/s. Eastman
Exports Global Clothing, Tirupur. The assessee has explained that it had received cash towards sales of goods and all transactions were duly recorded in the books of account. We find that the case was selected for limited scrutiny only to verify large cash deposits in the bank account. The A.O has not discussed the bank statement or the deposits in the bank account which are not explained, but has made addition u/s 68 of cash receipt of Rs 45,00,000 on 31.03.2017 against sale in the case of M/s Eastman Exports Globe Cloth and cash of Rs
10,44,399/- on 30.06.2016 in the case of M/s Indus League Division of Future Lifestyle Fashion recorded in the books of account. The A.O has gone beyond the scope of the reasons for which the case was selected for scrutiny. Even, otherwise on merit we do not find any justification for making the addition u/s 68 of the Act, when cash receipts are out of sale proceeds and duly recorded in books of account and income has already been offered for tax. Merely because the other party has not submitted the copy of account or there is mismatch in the ledger account submitted by the other party, addition u/s 68 of the Act cannot be made without providing opportunity to the Jeeva

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assessee to explain the mismatch. We, therefore reverse the order of Ld CIT(A) and direct the A.O to delete the addition. Accordingly, the additions made under section 68 of the Act are deleted.
6. In the result, the appeal filed by the assessee is allowed.

Order pronounced on 13th day of November, 2025 at Chennai. (मनु कुमार िग र)
(Manu Kumar Giri)
ाियक सद! / Judicial Member
(जगदीश)
(Jagadish)
लेखा
लेखा
लेखा
लेखा सदय
सदय
सदय
सदय /Accountant Member
चेनई/Chennai, दनांक/Dated: 13th November, 2025. EDN, Sr. P.S

आदेश क ितिल प अ े षत/Copy to:
1. अपीलाथ/Appellant
2.  थ/Respondent
3. आयकर आयु/CIT, Chennai/Madurai/Coimbatore/Salem
4. िवभागीय ितिनिध/DR
5. गाड फाईल/GF