PONGIYANNAN THANGAVEL,TIRUCHENGODE vs. ACIT, CIRCLE 1, ERODE, ERODE

ITA 2929/CHNY/2025Status: DisposedITAT Chennai17 March 2026AY 2011-20125 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found that both the AO and CIT(A) had accepted that the assessee incurred expenses of Rs.21,35,094/- for maintenance and repair of his lorries, indicating he possessed lorries and earned income from them. The assessee had provided registration certificates for his owned lorry and leased lorries, along with confirmation letters from owners. While the Revenue pointed out that some confirmation letters were for FY 2009-10, the Tribunal noted that two leased lorries were the same as those leased in FY 2011-12, accepted by the AO in AY 2012-13, suggesting continuity of leasing from FY 2009-10 to FY 2011-12, including the relevant FY 2010-11. Therefore, the Tribunal deemed it appropriate to estimate the assessee's income by following the approach adopted by the AO in AY 2012-13. The Tribunal estimated turnover of Rs.16.00 to 16.20 lakhs per lorry, totaling Rs.64,80,000/- for 4 lorries, and assessed income at Rs.2,40,000/- under Section 44AE. For the remaining credits of Rs.8,23,119/-, income was estimated at 8% thereof, amounting to Rs.65,850/-. The CIT(A)'s order was set aside, and the AO was directed to assess income accordingly.

What were the facts?

The assessee, an individual, failed to file his Return of Income for Assessment Year 2011-12. The Assessing Officer (AO) reopened the assessment upon noticing cash deposits of Rs.41,22,300/- and Rs.3,73,322/- in the assessee's bank accounts. The assessee did not respond to notices, leading to an ex-parte assessment order. The AO added the total bank credits of Rs.73,03,119/- as unexplained money under Section 69A. The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], claiming the deposits were from his lorry plying business and requesting assessment under Section 44AE. The CIT(A) forwarded the evidence to the AO for a remand report. The AO accepted a reduction of Rs.21,35,094/- for lorry maintenance expenses and other credits, but sustained the remaining addition of Rs.50,76,400/-. The assessee further submitted an order for AY 2012-13 where the AO accepted his lorry business income. Aggrieved, the assessee appealed to the ITAT.

What were the issues?

1. Whether the Tribunal had to decide if the assessee had proved that the credits in his bank account were out of his lorry plying business, as contended by the assessee, or if he had failed to prove the sources for the credits, as argued by the Revenue. Assessee's Contentions: - The assessee submitted proof of owning one lorry and leasing three others, along with registration certificates and confirmation letters from owners. - The AO and CIT(A) accepted expenses of Rs.22,26,719/- for repairs and maintenance, indicating the assessee plied lorries. - The assessee relied on the AO's assessment order for AY 2012-13, where the AO accepted his lorry business and sources for credits. - The assessee prayed for the same method of assessment as in AY 2012-13 to be adopted for the current year. Revenue's Contentions: - The assessee failed to prove that the credits in the bank account were out of the lorry plying business. - The confirmation letters from lorry owners were for FY 2009-10, not the relevant FY 2010-11, thus failing to prove sources for credits.

Which sections of the Income-tax Act were involved?

Section 144,Section 147,Section 148,Section 69A,Section 44AE,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI S.S. VISWANETHRA RAVI & SHRI S. R. RAGHUNATHA

For Respondent: Ms. R. Anitha, Addl. CIT
Hearing: 10.03.2026Pronounced: 17.03.2026

PER S. R. RAGHUNATHA, AM :

This appeal has been preferred by the Assessee against the order dated 08.10.2025 passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the “Id.CIT(A)’], which arises out of the assessment order dated 30.11.2018 passed u/s. 144 r.w.s.147 of the Income Tax Act, 1961 [hereinafter referred to as “the Act’] passed by the Assistant Comm

The order continues below.

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