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Facts
The assessee's case was reopened under Section 147 for AY 2017-18 due to unexplained cash deposits of Rs. 1,05,87,899/- in his bank account, for which no return of income was initially filed. The Assessing Officer added the entire amount under Section 69A as the assessee failed to explain the source, and this addition was upheld by the CIT(A).
Held
The Tribunal upheld the CIT(A)'s order, stating that the assessee failed to provide satisfactory explanations or produce supporting evidence during the assessment and first appellate proceedings. The additional evidence furnished before the Tribunal (a post-dated certificate) was not accepted under Rule 29 of the ITAT Rules, as it was not part of the original assessment record. The Tribunal found no merit in the appeal and sustained the addition.
Key Issues
Whether the addition of unexplained cash deposits under Section 69A was justified, and whether additional evidence, not produced before lower authorities, should be admitted by the Tribunal.
Sections Cited
147, 139, 143(2), 142(1), 133(6), 69A, 144, 115BBE, 234A, 234B, 234C, Rule 29 (ITAT Rules)
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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Inturi Rama Rao & Shri Sonjoy Sarma
Assessment Years: 2017-18 Baiju Lekshmanan ITO, WARD-1 & TPS, v. Alappuzha Marackasseril, Atiramthengu, Alumpeedika PO, Prayar South, Kollam – 690547. PAN : AMBPL8921A. (Appellant) (Respondent) Appellant by : Shri Akhil Shaji, Advocate Respondent by : Smt. Leena Lal, Snr AR. Date of Hearing : 03.06.2025 Date of Pronouncement : 12.06.2025 O R D E R Per Sonjoy Sarma: This appeal is filed by the assessee against the order dated 27.11.2024 by the National Faceless Appeal Centre (hereinafter referred to as ‘CIT(A)’] for the assessment year 2017–18.
The Registry has informed that the appeal filed by the assessee is barred by limitation by 17 days. An application seeking condonation of delay for 17 days has been filed by the assessee explaining reasons for such delay. We, after considering the application for condoning the delay, condone the delay and admit the appeal for adjudication.
Baiju Lekshmanan 3. Brief Facts of the case are that the case of the assessee was selected for re-assessment u/s 147 of the Act based on information that the assessee had made cash deposits totaling Rs.10587899/- in his bank account maintained with South Indian Bank during the relevant financial year. The assessing officer observed that the assessee has not filed return of income for the assessment year 2017-18 under section 139 despite having taxable income. Accordingly notices u/s 143(2) and 142(1) were issued. In response to the same the assessee filed a return of income for the assessment year 2017-18. Subsequently a statutory notice u/s 143(2) and 142(1) were issued to the assessee. But the assessee failed to provide any explanation regarding the transaction to the assessing officer in order to verify the claim. Notice under section 133(6) was issued to the South Indian Bank. Based on the banker response, it was found that cash deposits amounting to Rs.1,05,87,899/- made during the year by the assessee in his account. Since no satisfactory reply found from the assessee, the entire amount of Rs.1.05,87,899/- was added to the total income of the assessee under section 69A of the act as the assessee failed to explain the source of the same and assessed the total income under section 147/144 of the act.
Dissatisfied with the above order, the assessee preferred an appeal before the ld. CIT(A) and the ld. CIT(A) upheld the order of the Assessing Officer by observing in following manner:
“7.1 Discussion and Decision :- I have gone through the Grounds of Appeal, Statement of Facts, assessment order, written submission along with supporting evidence. The grounds of appeal filed by the appellant are being adjudicated are as under: Grounds of appeal No. 1, 2 & 3: The grounds No. 1, 2 & 3 are 7.1 related to addition made by the AO to the tune at Rs. 1,05,87,899/- on account of Cash Deposit for year under consideration.
7.1.1 During the course of assessment proceedings, the AO found that "there is no reasonable/satisfactory explanation for the cash deposits made in the bank account of the assessee for the supply done to his clients. The assessee submitted that the TKP Marine Industries and AB ICE Fish merchants are his main clients. But from the bank a/c statement it can be seen that only few credits have been received from TKP Marine Industries. Also, as per assessee's submission, TKP Marine Industries and AB ICE Fish merchants are located at Alappuzha and Thrichur respectively. But the assessee has received cash deposits from various places Ambalapuzha, Nileshwaram and Kasargod. Also, no evidence or proof has been furnished by the assessee to prove the identity, genuineness and creditworthiness of the transaction. There is no evidence whatsoever and substantiate why cash deposits have been made by his clients. It is very clear that the assessee does not have any evidence/proof to substantiate the submissions made by him. Though the assessee claims that cash deposits were received out of fish sales, there is no proof to substantiate his claim. The genuineness of the transaction, the identity of the buyers and the creditworthiness of the transactions remain unexplained." Accordingly the AO passed Order u/s 147 r.w.s. 144B of the I.T. Act, 1961 after making addition of Rs. 1,05,87,899/- on account of cash deposit. 7.1.2 I have carefully gone through the assessment order, Fact of the Case and written submission made by the appellant. The appellant's contention raised in this appeal that the appellant is a local fisherman during the said A.Y. He arranged fish from the harbor of azheekal and kavanad, they are mainly from Tamilnadu state. During the appellate proceedings, the appellant stated that main collectors of fish are 1.SALAHUDEEN.S, T K P MARINE INDUSTRIES, PUNNAPRA P O, ALAPPUZHA, KERALA 2. SALIM, SA B ICE FISH MERCHAND, PERUMPILAVOOR, THRICHUR, KERALA. In this regard the Hearing Notice/Letter issued to appellant for providing the relevant documents/evidences. (a) In response to the Notice/letter the appellant submitted that the TKP Marine Industries and AB ICE Fish merchants are his main clients. But, the appellant has not submitted the confirmation of TKP Marine Industries and SAB ICE Fish merchants that cash was belonging to them. (b) The appellant has also failed to produce documents regarding cash given to him on behalf of TKP Marine Industries and SAB ICE part of their turnover. (c) Further Appellant has stated that fish were purchased by him on behalf of these parties. But, appellant has not furnished any evidence/documents about the details of income/commission received by him for this work.
Baiju Lekshmanan (d) It is ample clear that the appellant does not have any evidence/proof to substantiate the submissions made by him. The genuineness of the transaction, the identity of the buyers and the creditworthiness of the transactions remain unexplained. Hence, the addition made by the A.O. is upheld. 7.2 Ground of Appeal
No. 4 relates to charging of Tax u/s 115BBE of the ACT: Since the addition made by the AO on account of Cash Deposit u/s 69A of the I.T. Act. Therefore, Tax attracts with u/s 115BBE of the I.T. Act, 1961. Hence, this ground of appeal also fails. 7.3 Grounds of appeal No. 5 related to charging of interest u/s 234 A, B, C is being consequential in nature. Hence it is not adjudicated upon.
8. Result: In the result, the appeal filed by the appellant for A.Y. 2017-18 is treated as "Dismissed".”
5. Aggrieved by the above order, the assessee preferred an appeal before the Tribunal raising various grounds however the primary contention of the assessee is that the assessment was made by the assessing officer was bad in law and is liable to be set aside. The ld. AR stated that the assessee was engaged in the un- organized sector and amount credited from the fishing trade. He submitted a certificate dated 16.04.2025 from proprietor of SAB Fisheries Ice Fish Merchant & Commission Agent stating that funds have been remitted to the assessee’s bank account in connection with the business transaction relating to fish supply.
6. On the other hand, the ld. DR objected to such document furnished by the assessee before this Tribunal stating that the assessment order dated 29.03.2022 was framed way back and the ld. CIT(A)’s order date is 27.11.2024 but the assessee never submitted any such document before the authorities below in order to substantiate his claim and the certificate dated 16.04.2025 is nothing but a post-dated certificate which was never produced before the authorities below. Therefore, at this stage, the contention made by the assessee may be rejected.
Baiju Lekshmanan 7. We have heard the rival contentions of both the parties and carefully perused the material available on record. We find that the certificate dated 16.04.2025 furnished by the assessee before us was never submitted during the assessment proceedings and the document was post-dated and not part of the original assessment record. Therefore, we decline to accept the additional evidence as valid under Rule 29 of the ITAT Rules at this stage. Therefore, we find that the assessee’s claim lacks of evidentiary value and no interference is warranted with the findings of the lower authorities. We, therefore, do not find any merit of the present appeal and the order of the ld. CIT(A) is accordingly upheld and the addition made by the Assessing Officer is sustained.
In the result, the appeal of the assessee is dismissed.
Order pronounced on 12.06.2025.