SRI LAKSHMI TYRES,TIRUVALLUR vs. INCOME TAX OFFICER WARD 1 TIRUVALLUR, TIRUVALLUR

The effective ground of appeal in this appeal of assessee is against the addition u/s. 68 of the Income-tax Act, 1961 (hereinafter “the Act”) of cash deposit of Rs. 2,34,87,335/- in the bank account.

The assessee is a firm and has not filed its return of income. The A.O based on the information that the assessee has deposited cash of Rs.2,34,87,335/- in Andhra Bank with A/c.No.211313100000201, but has not filed return of income reopened the assessment by issuing notice u/s. 148 of the Act. The assessee in response to notice u/s 148 of the Act filed return of income showing total income at Nil. The assessee before the A.O has stated that the assessee has been carrying out proprietary business in the name of M/s. Sri Lakshmi Tyres and the cash deposited of Rs.2,34,87,315/- is relating to the proprietary business and has been duly offered in the income tax return of Shri G. Venkatesulu. The assessee has submitted that he has given partnership firm’s PAN in place of personal PAN to the Bank by mistake. The A.O did not accept assessee’s explanation as Andhra Bank Account in which cash was been deposited was not appearing in the asset side of the proprietors balances sheet. On appeal, the Ld. CIT(A) dismissed the appeal on the ground that the firm has never filled income tax return and in the absence of return there is no data available to verify that :- 3 -:

The Ld. Authorized Representative (AR) of the assessee has submitted that the partnership firm was formed to carry out retail dealer business of MRF Tyres, but on advice of tax consultant decided to carry out the business as proprietor business of Shri G.Venkatesulu in the name of Shri Laxmi Tyers. The Ld. AR has submitted that Shri G Vekatesulu has been showing the income from Sri Laxmi Tyres as proprietary concern since his appointment as dealer of MRF. The Ld. AR in support of his contention filled a copy of appointment letter issued by MRF dated 28.03.2008, GST/VAT registration copy and GST/VAT return copy as additional evidence. The Ld. AR also submitted the copy of income tax return, audit report and bank statement of Shri G. Venkatesulu, in support of its contention that all the cash deposits in the bank account has been reflected in the books of accounts of Sri Laxmi Tyres and the income has been shown in his return of income. In regard to the Ld. A.O’s contention that the bank account has not been shown in the asset side of balance sheet of Proprietary concern Sri Laxmi Tyres, the Ld. :- 4 -:

The Ld. Departmental Representative, on the other hand, relied on the orders of authorities below.

We have heard the rival submissions, and perused the materials available on record. The A.O has reopened the assessment on the basis of information that there is a cash deposit of Rs. 2,34,87,335/- in A/c. No.211313100000201 of Andhra Bank in the name of M/s. Sri Lakshmi Tyres, but it has not been filed return of income . The A.O has made addition of cash deposit in the order passed u/s 147 of the Act. The Ld. AR has submitted that Shri G. Venkatesulu has formed partnership firm for dealership of MRF Tyres, in the name of Sri Lakshmi Tyres, but carried the business only as a proprietor concern. The Ld. AR has submitted that the assessee has wrongly given firm’s PAN in place of proprietary firm PAN to the bank. The Ld. AR has submitted that the cash deposits in the bank account are sale :- 5 -:

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 17th January, 2025. (महावीर िसंह) (Mahavir Singh) उपाNO / Vice President (जगदीश) (Jagadish) लेखा लेखा लेखा लेखा सदय सदय सदय सदय /Accountant Member चे नई/Chennai, "दनांक/Dated: 17th January, 2025. EDN/-

अपीलाथ/Appellant 2.  थ/Respondent 3. आयकर आयु/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय ितिनिध/DR 5. गाड फाईल/GF