AREES ERINHIKKATH,TIRUR vs. ITO, WARD 1 & TPS, TIRUR

PDF · subscribers
ITA 483/COCH/2025Status: DisposedITAT Cochin11 August 2025AY 2016-17Bench: SHRI INTURI RAMA RAO (Accountant Member), SHRI PRAKASH CHAND YADAV (Judicial Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

While the assessee's explanation for the funds received from a Qatar-based partnership as profit share was not substantiated with evidence, the crediting of money to the NRE account made it difficult to outright disbelieve the assessee. Therefore, the matter was remanded to the AO for a fresh assessment.

What were the facts?

The assessee filed an income return for AY 2016-17 disclosing income of Rs. 95,670/- and agricultural income of Rs. 58,200/-. The AO completed the assessment at a total income of Rs. 1,14,79,102/-, adding Rs. 1,00,31,129/- credited to the assessee's NRE account due to failure to prove genuineness. The CIT(A) confirmed the AO's action.

What were the issues?

Whether the addition made by the AO on account of unexplained credits in the NRE account was justified, and if the assessee had discharged the onus of proving the genuineness of the transaction.

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 & SHRI PRAKASH CHAND YADAV, JM

For Appellant: Shri Shaji Poulose, CA
For Respondent: Smt. Leena Lal, Sr. DR
Hearing: 06.08.2025Pronounced: 11.08.2025

O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 25.04.2025 for Assessment Year (AY) 2016-17.

2.

Brief facts of the case are that the assessee is an individual. The return of income for the A.Y. 2016-17 was filed on 16/03/2018 disclosing income of Rs. 95,670/- and agricultural income of Rs. Arees Erinhikkath 58,200/-. Against the said return of income, the assessment was completed by the ITO, Ward-1 & TPS, Tirur (for short, 'AO') vide order dated 08/12/2018 passed u/s. 143(3) of the Income Tax Act, 1961 (for short, 'the Act') at a total income of Rs. 1,14,79,102/-. While doing so, the AO brought to tax a sum of Rs. 1,00,31,129/- being amount credited in the NRE account for failure of the appellant to discharge onus of proving genuineness of the credit.

3.

Being aggrieved by the assessment order, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO.

4.

Being aggrieved, the appellant is in appeal before the Tribunal in the present appeal.

5.

It is submitted that the appellant furnished the books of accounts, bank account copies before the AO as well as learned CIT(A). It is further submitted that appellant has received the said amount from the erstwhile partnership form based at Qatar, of which he was a partner.

6.

On the other hand, ld. Sr. DR vehemently opposed the above submission and submits that since the assessee failed to prove the source of the credits received, the AO was justified in making the addition.

Arees Erinhikkath 7. We have heard rival submissions and perused the material on record. The AO made the addition of Rs. 1,00,31,129/- credits received from NRE for failure of the appellant to prove the genuineness of the transaction. The explanation of the appellant that the said funds were received from a partnership firm based at Qatar as a share of profit is not substantiated by filing necessary evidence. However, since money was credited to the NRE account, there is no reason to disbelieve the explanation offered by the assessee cannot be easily brushed aside. Therefore, in the interest of justice, matter requires remand to the file of AO for denovo assessment in accordance with law after affording reasonable opportunity of hearing to the assessee.

8.

In the result, the appeal filed by the assessee stands partly allowed for statistical purposes.

Order pronounced in the open court on 11th August, 2025.

Recent GST High Court judgments

Search GST case law →