PK AHAMMED AND COMPANY,CALICUT vs. ITO, WARD-1(3), KOZHIKODE

ITA 613/COCH/2025Status: DisposedITAT Cochin29 October 2025AY 2017-18Bench: SHRI INTURI RAMA RAO (Accountant Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that both the AO and the CIT(A) failed to provide the appellant an opportunity to produce further evidence to support their explanation regarding the cash deposits. It is a settled legal principle that such an opportunity must be given before rejecting an explanation.

What were the facts?

The appellant, a partnership firm, filed its return of income for AY 2017-18. The AO made an addition of Rs. 36,74,500/- on account of cash deposits in specified bank notes during demonetisation, rejecting the appellant's explanation of realization from debtors. The CIT(A) upheld this addition, stating the appellant failed to provide confirmation letters.

What were the issues?

Whether the CIT(A) was justified in confirming the addition made on account of cash deposits in SBN during demonetisation without affording an opportunity to the assessee to produce evidence.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH

Before: SHRI INTURI RAMA RAO, AM

For Appellant: Shri Arjun Nedungadi, CA
For Respondent: Smt. Leena Lal, Sr. D.R
Hearing: 27.10.2025Pronounced: 29.10.2025

This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 30.06.2025 for Assessment Years (AY) 2017-18. 2. Brief facts of the case are that the appellant is a partnership firm duly constituted under the Partnership Act. The return of income for AY 2017-18 was filed on 23.10.2017 declaring income of Rs. 20,57,270/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-1(3), Kozhikode (hereinafter called "the AO") vide order dated 24.12.2019 passed P.K. Ahammed and Company u/s. 143(3) of the Income Tax Act, 1961 (the Act) at a total income of Rs. 57,31,770/-. While doing so, the AO made addition of cash deposi

The order continues below.

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