VIRUTCHAM MICRO FINANCE LTD.,MADURAI vs. ITO, CORP. CIRCLE.2,, MADURAI
आयकर अपीलीय अिधकरण, ’ए’ Ɋायपीठ, चेɄई
IN THE INCOME-TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI
ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ एवं ŵी अिमताभ शुƑा, लेखा सद˟ के समƗ
Before Shri S.S. Viswanethra Ravi, Judicial Member &
Shri Amitabh Shukla, Accountant Member
आयकर अपील सं./I.T.A. No.1313/Chny/2025
िनधाŊरण वषŊ/Assessment Year: 2017-18
Virutcham Micro Finance limited,
C-50, Gurudev Nagar, Avaniyapuram
Bypass Road, Madurai 625 002. [PAN:AACCV9529Q]
Vs. The Assistant Commissioner of Income Tax,
Corporate Circle 2,
Madurai.
(अपीलाथŎ/Appellant)
(ŮȑथŎ/Respondent)
अपीलाथŎ की ओर से / Appellant by :
None
ŮȑथŎ की ओर से/Respondent by :
Ms. V. Supraja, Addl.CIT
सुनवाई की तारीख/ Date of hearing :
16.07.2025
घोषणा की तारीख /Date of Pronouncement
:
18.07.2025
आदेश /O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 27.03.2025 passed by the ld. Commissioner of Income Tax
(Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2017-18. 2. When the appeal was taken up for hearing on 16.07.2025, we find no representation on behalf of the assessee. Further, on perusal of the record, we find that the notice issued on 18.06.2025 returned
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unserved with an endorsement “no such person addressee return to sender”. Therefore, the assessee called absent and set exparte and we proceed to decide the appeal on merits after hearing the ld. DR basing on the material available on record.
The assessee raised 5 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the addition made under section 68 of the Income Tax Act, 1961 [“Act” in short] in the facts and circumstances of the case.
Brief facts emanating from record are that the assessee filed the return of income admitting total income of ₹.35,00,150/- under normal provisions and deemed income of ₹.21,17,239/- under section 115JB of the Act. The case was selected for complete scrutiny and issued statutory notices under sections 143(2) and 142(1) of the Act. On verification of the details filed by the assessee in response to various notices, the Assessing Officer noted cash deposits in his bank account to an extent of ₹.54,07,500/- in SBN during demonetization period and the details are reflected in page 2 of the assessment order. The details furnished by the bank towards SBN notes deposited by the assessee
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are extracted at page 3 & 4 of the assessment order. From the analysis of cash book for FY 2016-17, the Assessing Officer observed that the assessee maintained the cash balance of ₹.12,37,500/- only at the month end of April, 2016 and gradually increases month by month and resulted in a cash balance of ₹.53,85,137/- at the month end of October, 2016 and then dropped to the level of less than 14 lakhs for the months after demonetization, which raises dissatisfaction towards the explanation of the assessee and genuineness of the cash book maintained since the practice of holding huge cash balance during the month of October, 2016 does not pass the test of prudence. Further, the Reserve Bank of India carried out an inspection of the books of account of the assessee between March 12 and 15, 2018. The RBI indicated the assessee that details of SBN collected, if any, was not disclosed in the Annual Report in a tabular form as prescribed in the notification issued by the Ministry of Corporate Affairs amending the Schedule III of the Act on March 31, 2017. Since the explanation submitted by the assessee is unsatisfactory, the Assessing Officer treated the cash deposit in the form of SBN at ₹.54,07,500/- as unexplained cash under section 68 of the Act and added to the total income of the assessee and completed the assessment under section I.T.A. No.1313/Chny/25
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143(3) of the Act dated 29.12.2019. On appeal, the ld. CIT(A) confirmed the addition made by the Assessing Officer since the assessee has not submitted any reply except for seeking adjournment even after 5 years of filing the appeal. On being aggrieved, the assessee is in appeal before the Tribunal.
Heard the ld. DR and perused the material available on record. In the grounds of appeal, the assessee has contended that the addition made by the Assessing Officer constitutes double taxation of income already accounted for by the assessee. It was also contended that the application of section 115BBE of the Act is unwarranted as the foundational requirement of unexplained income under section 68 of the Act is absent, rendering higher tax rate inapplicable and prayed to delete the addition. The assessee also agitated that the Assessing Officer has unjustifiably rejected the audited books of accounts. Considering the above prayer of the assessee, in the interest of natural justice, we deem it proper to remand the matter to the file of the ld. CIT(A) to afford one more opportunity to the assessee and thereafter decide the issue afresh on merits in accordance with law after considering the submissions of the assessee as may be filed. The assessee is also directed to furnish complete details before the ld.
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CIT(A) without fail and should not seek adjournment. Thus, the ground raised by the assessee is allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 18th July, 2025 at Chennai. (AMITABH SHUKLA) ACCOUNTANT MEMBER Chennai, Dated, 18.07.2025
Vm/-
आदेश की Ůितिलिप अŤेिषत/Copy to:
1. अपीलाथŎ/Appellant,
2.ŮȑथŎ/ Respondent,
3. आयकर आयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem
4. िवभागीय Ůितिनिध/DR &
5. गाडŊ फाईल/GF.