INCOME TAX OFFICER, WARD 2, CUDDALORE vs. SHANMUGA DEVAR MURALIDARAN, NEYVELI

आयकर अपीलीय अिधकरण, ‘ए’
यायपीठ, चे ई।
IN THE INCOME TAX APPELLATE TRIBUNAL
‘A’ BENCH: CHENNAI

ी एबी टी. वक
, ाियक सद एवं
एवं
एवं
एवं

ी एस. आर. रघुनाथा, लेखा सद के सम

BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI S.R.RAGHUNATHA, ACCOUNTANT MEMBER

आयकर अपील सं./ITA No.604/Chny/2025
िनधारण वष/Assessment Year: 2017-18
&
Cross-Objection No.67/Chny/2025
िनधारण वष/Assessment Year: 2017-18

The ITO,
Ward-2,
Cuddalore.

v.
Shanmuga Devar –
Muralidaran,
189, Priya Belt Traders,
Cuddalore Main Road,
Neyveli-607 802. [PAN: AKZPM 7254 R]
(अपीलाथ/Appellant)

(यथ/Respondent/Cross-
Objector)

Department by :
Ms.R. Kavitha, Addl.CIT
Assessee by :
Ms.N.V. Lakshmi, Adv.
सुनवाईक तारीख/Date of Hearing
:
08.09.2025
घोषणाक तारीख /Date of Pronouncement
:
07.10.2025

आदेश / O R D E R
PER ABY T. VARKEY, JM:

ITA No.604/Chny/2025 is an appeal preferred by the Revenue against the order of the Learned Commissioner of Income Tax
(Appeal)/NFAC, (hereinafter referred to as ‘Ld.CIT(A)‘), Delhi, dated
17.12.2024 for the Assessment Year (hereinafter referred to as ‘AY‘)
&
CO No.67/Chny/2025
(AY 2017-18)
Shanmuga Devar Muralidaran
:: 2 ::

2017-18 and CO No.67/Chny/2025 is a Cross-Objection filed by the assessee for AY 2017-18. 2. At the outset, the Ld.AR of the assessee submitted that the instant appeal preferred by the Revenue is hit by the CBDT Circular No.09/2024
on 17.09.2024 on account of low tax effect as per the normal provisions.
According to him, the AO has computed the addition u/s.68 of the Income
Tax Act, 1961 (hereinafter referred to as ‘the Act‘) as unexplained income and applied tax as per Section 115BBE of the Act @60%. Drawing our attention to the decision of the Hon’ble juri ictional High Court in the case of Smile Microfinance Ltd. v. ACIT in WP (MD) No.2078 of 2020 &
1742 dated 19.11.2024 (Madras-HC), wherein, it was held that Sec.115BBE of the Act applies on transactions on or after 01.04.2017
and since, the transactions in question were on or before 31.03.2017, rate of tax @60% doesn’t arise; and placed before us the working/rate of tax as per the normal provisions, which is seen to be less than ₹60 lakhs
[as per the first limb, it would be ₹57,23,182/- or as per the second limb, it would be ₹56,38,362/-]. Hence, he prayed that the instant appeal filed by the Revenue needs to be dismissed. The working regarding calculation of tax effect in the case of assessee is noted as under:
&
CO No.67/Chny/2025
(AY 2017-18)
Shanmuga Devar Muralidaran
:: 3 ::

the tax effect would be less than ₹60 lakhs. Hence, we find merit in the contention of the Ld.Counsel for the assessee that since tax rate @60%
as per Sec.115BBE of the Act applies on transactions on or after
01.04.2017 only as held by the decision of the Hon’ble Madras High Court in the case of Smile Microfinance Ltd. (supra), in this year i Sec.115BBE of the Act won’t apply. Hence, we find that the instant appeal of the Revenue is hit by the CBDT Circular on account of low tax effect as per the normal provisions and hence, the instant appeal filed by the Revenue stands dismissed.
4. As we have dismissed the appeal filed by the Revenue, Cross-
Objection filed by the assessee also stands dismissed as infructuous.
5. In the result, appeal filed by the Revenue & Cross-Objection filed by the assessee are dismissed.

Order pronounced on the 07th day of October, 2025, in Chennai. (एस. आर. रघुनाथा)
(S.R.RAGHUNATHA)
लेखा सदय/ACCOUNTANT MEMBER (एबी टी. वक
)
(ABY T. VARKEY)
याियक सदय/JUDICIAL MEMBER
चे ई/Chennai,
!दनांक/Dated: 07th October, 2025. TLN
&
CO No.67/Chny/2025
(AY 2017-18)
Shanmuga Devar Muralidaran
:: 5 ::

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