PATCHAIAPPAN ANBU KOTHANDARAMAN,PONDICHERRY vs. ACIT, PONDICHERRY CIRCLE,, PONDICHERRY

The present appeal is filed by the assessee against the order dated 31.07.2025 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as “ld.CIT(A)”), dismissing the appeal filed by the assessee against the assessment order dated 24.12.2019 passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”), pertaining to Assessment Year (A.Y.) 2017- 18.

The brief facts of the case are that the assessee is an individual and has filed his return of income for the impugned Assessment Year 2017-18 on :-2-: ITA. No:2547 /Chny/2025 06.01.2018 admitting a total income of Rs.18,98,280/-. The assessee’ case was selected for scrutiny under CASS and thereafter notice u/s.143(2) of the Act was issued on 08.08.2018. Multiple notices were issued upon the assessee. Hence after, the assessment order came to be passed on 24.12.2019 u/s.143(3) of the Act, wherein the Assessing Officer assessed the total income of the assessee at Rs.56,50,780/- by making an addition u/s.69 of the Act to the tune of Rs.37,52,500/- (Rs.20,80,500/-+ Rs.16,10,000/- + Rs.62,000/-) and raised a demand of Rs.39,93,928/-.

Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the ld.CIT(A) on various grounds. The ld.CIT(A) vide order dated 31.07.2025 upheld the addition made by the Assessing Officer.

Aggrieved by the above order of the ld.CIT(A), the assessee preferred the present appeal.

The assessee is engaged in the business of real estate and retail IMFL (Liqour) business. During the period between 10.11.2016 to 05.12.2016, the assessee deposited SBNs to the tune of Rs.22,92,000/- into three bank accounts but only Rs.2,11,500/- was deposited on the first available date, i.e.10.11.2016. The remaining figure, which is Rs.20,80,500/- were deposited in tranches. Further, the assessee also had fixed deposits of Rs.16,10,000/- and Rs.62,000/-.

During the assessment proceedings, the Assessing Officer issued a notice dated 04.12.2019, the assessee submitted his response electronically and submitted computation of income, financial statements, bank account statements, list of agricultural lands and such other details as called for. The Assessing Officer issued a notice u/s.133(6) to the banks in which the assessee maintains an account with and passed the order u/s.143(3) of the Act while making an addition u/s.69 of the Act to the tune of Rs.37,52,500/- (Rs.20,80,500/-+ Rs.16,10,000/- + Rs.62,000/-) after deducting the deposit of Rs.2,11,500/-.

Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the ld.CIT(A). The assessee, during the course of the appellate

Aggrieved by the order of ld.CIT(A), the assessee is in appeal before us.

Before us, the ld.AR of the assessee filed a paper book and submitted Cash Flow from Assessment Years 2015-16 to 2017-18, return of income for the impugned Assessment Year, statement of income, profit & loss account and balance sheet. The ld.AR of the assessee reiterated their submission from first appeal and argued that the Assessing Officer has erred in making an addition u/s.69 to the tune of Rs.37,52,500/- (Rs.20,80,500/-+ Rs.16,10,000/- + Rs.62,000/-) when there are documentary evidence explaining the source of these figures, which were also submitted before the Assessing Officer, but was not considered by him.

Per contra, the ld.DR argued that the order of the ld.CIT(A) is in conformity of law and appreciation of the facts of the case. The ld.DR submitted that the assessee failed to submit cash book, registers or vouchers to substantiate that Rs.20,80,500/- formed part of cash in hand and was not accrued post- demonetization. It was also reiterated that the assessee has not supplemented their statement with credible documents.

We have carefully considered the rival submissions, perused the material on record. The admitted facts are that the assessee is engaged in the business of :-4-: ITA. No:2547 /Chny/2025 real estate and retail of IMFL items. The assessee also earns income from agricultural lands. For the impugned Assessment Year, the assessee made SBN deposits from 10.11.2016 to 05.12.2016. The Assessing Officer vide order u/s.143(3), added a sum of Rs.37,52,500/- (Rs.20,80,500/-+ Rs.16,10,000/- + Rs.62,000/-) u/s.69 after deducting the cash deposit of Rs.2,11,500/- made on 10.11.2016. The question arising here is whether the assessee has adequately explained their source of deposits.

In this regard, we are of the view that the Assessing Officer has not considered the documents filed by the assessee during the course of the assessment proceedings. No reference is made in the assessment order, with respect to the various documents filed by the assessee during the course of assessment proceedings or how the explanation of the assessee is not acceptable. Adhering to the principles of natural justice, we remit the matter back to the Assessing Officer, for de-novo adjudication, so as to provide the assessee with another opportunity to demonstrate the cash deposited of the explained sources (agricultural land, real estate and retail IMFL items) as well as to demonstrate the fixed deposits sources with relevant documents and pass orders in accordance with the law.

In this result, the appeal of the assessee is allowed for statistical purposes.