MUKALEL PHILIP JOSE,KANNUR vs. ITO, WARD-4, KANNUR
Facts
The assessee, an individual deriving salary income, filed a return for AY 2011-12. The AO completed the assessment under Section 143(3), making an addition of Rs. 16,00,000/- for unexplained cash deposits in the bank account, after considering earlier cash withdrawals. The CIT(A) confirmed the addition, rejecting the assessee's explanation that the deposits were advances from a property sale, citing that the cheques were not issued by the assessee.
Held
The Tribunal held that the CIT(A)'s approach was untenable as it rejected the explanation without affording an opportunity to rebut and effectively went into the 'source of source' for an addition made under Section 69A. Consequently, the matter is restored to the AO for a de novo assessment, requiring a reasonable opportunity of hearing to be provided to the appellant.
Key Issues
Whether the addition of cash deposits as unexplained money was justified, and whether the CIT(A) erred in rejecting the assessee's explanation without proper opportunity and by examining the 'source of source' for an addition under Section 69A.
Sections Cited
143(3), 69A
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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM ITA No. 876/Coch/2025 Assessment Year: 2011-12 Mukalel Philip Jose .......... Appellant Mukalel House, Pushpagiri, Taliparamba Kannur 670141 [PAN: ACNPJ4619F] vs. The Income Tax Officer, Ward-4, Kannur .......... Respondent Assessee by: ------- None ------- Revenue by: Ms. Neethu S. Sr. DR Date of Hearing: 27.11.2025 Date of Pronouncement: 28.11.2025 O R D E R This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), Thane [CIT(A)] dated 20.08.2025 for Assessment Year (AY) 2011-12.
Brief facts of the case are that the appellant is an individual deriving income under the head ‘Salary’. The return of income for AY 2011-12 was filed on 10.08.2011 declaring total income of Rs. 2,07,790/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-4, Kannur (hereinafter called "the AO") vide order dated 23.01.2014 passed u/s. 143(3) of the Income Tax Act, 1961 (the Act) at total income of Rs.
2 ITA No. 876/Coch/2025 Mukalel Philip Jose 18,07,790/-. While doing so, the AO made addition of Rs. 16,00,000/- being cash deposits in the bank account for the failure of the appellant to offer any satisfactory explanation.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO for the failure of the appellant to substantiate the explanation in support of the cash deposits.
Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.
When the appeal was called on nobody appeared on behalf of the assessee despite due service of notice of hearing. Therefore, we proceed to dispose of the appeal after hearing the learned Sr. DR..
The learned Sr. DR submits that the AO made addition only on peak deposits after giving benefit of earlier cash withdrawals from bank account. The appellant had not offered any explanation. Therefore, the addition was rightly made by the AO.
The issue in the present appeal relates to the addition of cash deposits of Rs. 16,00,000/-. During the course of assessment proceedings the AO found that the appellant made cash deposit of Rs. 1,00,24,837/-. After granting benefit of earlier cash withdrawals from the bank account the balance amount of Rs. 16,00,000/- was treated as unexplained money of the appellant for the failure of the
3 ITA No. 876/Coch/2025 Mukalel Philip Jose appellant to offer any satisfactory explanation as to the source of the cash deposits. However, during the course of proceedings before the learned CIT(A), the appellant offered an explanation that the cash deposits were made out of the advances received on sale of immovable property from one Mr. K.V. Kumaran. However, the CIT(A) had not accepted the explanation solely on the ground that the cheques deposited were not issued by him. I am of the considered opinion that the approach adopted by the CIT(A) is untenable in the eyes of law as the CIT(A) cannot go to the source of source of the cash deposits as addition was made u/s. 69A of the Act. The CIT(A) ought not have rejected the explanation without giving opportunity to the appellant to rebut. Therefore, the matter is restored back to the file of the AO for de novo assessment in accordance with law after affording reasonable opportunity of hearing to the appellant.
In the result, the appeal filed by the assessee stands partly allowed for statistical purposes.
Order pronounced in the open court on 28th November, 2025.
Sd/- (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 28th November, 2025 n.p.
4 ITA No. 876/Coch/2025 Mukalel Philip Jose Copy to:
The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order
Assistant Registrar ITAT, Cochin
