BALAKRISHNAN RAMANATHAN,GOBICHETTIPALAYAM vs. ITO, WARD-2(1), ERODE

आदेश /O R D E R

PER S. R. RAGHUNATHA, AM :

“1. The order of the NFAC, Delhi dated 31.07.2025 vide Din & order No ITBA/APL/S/250/2025-26/1079125160(1) for the abovementioned Assessment Year is contrary to law, fact and in circumstances of the case.

:-2-: ITA. No:2437/Chny/2025

2. The NFAC, Delhi erred in impliedly confirming the assumption of jurisdiction under section 147 of the Act and consequently erred in impliedly confirming the passing of the re-assessment order without assigning proper reasons and justification.

3. The NFAC, Delhi erred in passing the re-assessment order and ought to have appreciated that the re-assessment order was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law.

7. The NFAC, Delhi failed to appreciate that the disputed credits in the bank account related to the sum received by the appellant while running the petrol bunk in the name & style of M/s.Reliance Petrol Bunk and textile business in the name and style of M/s.GRB Silk Centre in the capacity of HUF and ought to have appreciated that the assessment of such sum in the hands of the appellant in his individual capacity should be construed as nullity in law. 8. The NFAC, Delhi failed to appreciate that having offered to tax the income component embedded on such credits in the return of income filed by the appellant in the capacity of the HUF, the consequential addition made in the appellant herein would tantamount to double taxation, there by vitiating the decision to confirm the addition made in the re-assessment order. 9. The NFAC, Delhi failed to appreciate that the entire-re-computation of taxable total income was wrong, erroneous, incorrect, invalid, unjustified and not sustainable both on facts and in law. 10. The NFAC, Delhi failed to appreciate that having not taken into consideration the directions rendered by the income Tax Appellate Tribunal in appellant’s own case in for the assessment year: 2011-12, the sustenance of such credits as income of the appellant should be reckoned as bad in law. 11. The NFAC, Delhi failed to appreciate that there was no proper opportunity given before passing of the impugned order and any order passed in violation of the principles natural justice would be nullity in law.

:-3-: ITA. No:2437/Chny/2025 12. The appellant craves leave to file additional grounds/arguments at the time of hearing.”

4. Being aggrieved by the assessment order dated 02.12.2019 passed u/s.144 r.w.s 147 of the Act, the assessee carried the matter in appeal before the ld.CIT(A), assailing the estimation of income and the consequent addition made by applying a rate of 8% on Rs.2,70,96,195/-, resulting in an addition of Rs.21,67,696/-. Accordingly, the assessee challenged, in toto, the assessed income of Rs.22,87,696/- before the ld. CIT(A). On perusal of the documents and details furnished by the assessee, the ld. CIT(A) confirmed the additions made by the AO by holding as under: - “8.7. The above judicial pronouncements are squarely applicable in the instant case as the appellant has failed to satisfactorily discharge his onus to establish that the said transactions pertain solely to HUF status and were correctly reported in tax filings. Thus due to lack of adequate proof in support of his claim, the addition was made by the AO. 8.8. In view of the above discussion, the Jurisdictional Assessing Officer was correctly estimating the income of Rs.21,67,696/- @ 8% of total transaction of Rs.2,70,96,195/- in the hands of appellant. Therefore, the action of the Jurisdictional Assessing Officer is found to be justifiable and does not warrant any interference at this stage. The additions made by the Assessing Officer is confirmed.

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5. Aggrieved by the impugned order of the ld.CIT(A), the assess preferred an appeal before us.

6. Before us, when the appeal was taken up for hearing, the ld.AR of the assessee assailed that the ld.CIT(A) has erred in the confirming the estimation of income and the consequent addition made by applying a rate of 8% on Rs.2,70,96,195/-, resulting in an addition of Rs.21,67,696/- and in toto the additions at Rs.22,87,696/- despite the assessee having explained the facts of the case. During the course of hearing, the ld.AR filed a paper book for A.Y.2013-14 with 173 pages which contains the return of income, computation of total income of HUF. The Tax audit report and the financial statements of HUF were also placed on record of the impugned year. The ld.AR further contended that similar additions were made by the AO in the hands of the individual assessee for A.Y.2017-18 which were consequently deleted by the ld.CIT(A) vide order dated 18.12.2024, by accepting the similar explanations of the assessee, which was also placed at pages 149 of the paper book.

:-5-: ITA. No:2437/Chny/2025 9. We have heard the rival contentions, perused material available on record and gone through the orders of lower authorities. The fact with regard to the impugned dispute are that the assessee has deposited a sum of Rs.5,58,995/- into the bank account of the assessee bearing account number 002501503209 and Rs.2,18,37,200/- into another bank account bearing Account No.002505000252 held with ICICI bank, Gobichettipalayam branch and thus the total transactions appearing in above mentioned bank accounts amounts to Rs.2,70,96,195/-. Admittedly, the assessee has filed a return in response to notice u/s.148 of the Act on 05.11.2018 by admitting income of Rs.1,20,000/-. A notice u/s.143(2) was issued on 14.05.2019 and the same was served on the assessee. The assessee submitted that he was engaged in the business of petroleum retail trading and textile business in the status of HUF and that the transactions reflected in the bank accounts held in his individual name pertained to the said businesses carried on by the HUF during the impugned year. We find from the paper book placed on record, which contains the return of income, computation of total income, tax audit report, and financial statements of the HUF, that the said contention of the assessee is supported by documentary evidence. We also observe that similar additions were deleted by the ld CIT(A) for A.Y.2017-18 vide order dated 18.12.2024.

Order pronounced in the open court on 07th January, 2026 at Chennai.