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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL & HON’BLE SHRI MANU KUMAR GIRI
(िनधा�रणवष� / Assessment Year: 2017-2018) Murugesan Jothi, Vs. The Income Tax Officer, 223/1, Maturha Cotspinn Private Ltd. Ward 2(1) Gobi 638 452. Erode Tamil Nadu [PAN: ACAPJ 0446K] (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� क� ओर से/ Appellant by : Shri N.C.Ravi Krishnan, Advocate ��यथ� क� ओर से /Respondent by : Shri ARV Srinivasan, IRS, Addl. CIT सुनवाई क� तार�ख/Date of Hearing : 04.11.2024 घोषणा क� तार�ख /Date of Pronouncement : 29.11.2024 आदेश / O R D E R PER MANU KUMAR GIRI (Judicial Member)
This appeal by assessee is arising out of the order of the Additional/Joint Commissioner of Income Tax (Appeals)-5, Office of the Commissioner of Income Tax (Appeal), Mumbai in Order No.ITBA/APL/S/250/2024-25/1066136300 (1), dated 27.06.2024. The assessment was framed by the Income Tax Officer, Ward 2(1), Erode for the assessment year 2017-2018, u/s.143(3) of the Income Tax Act, 1961 (in short ‘’the Act’) vide order dated 06.12.2019.
2. Brief facts of the case are that assessee is an individual had filed her return of income for the assessment year 2017-18 on 31.03.2018 by electronically, admitting the income of Rs.8,24,360/-. The same was processed u/s.143(1) of the Act. The case was selected for scrutiny and the notice u/s 143(2) was issued on 24.09.2018. In response to the notices, the assessee submitted details called for vide above said notices on various dates such as copy of return of income, statement of total income, cash book, copy of ITR along with statement of total income for A.Ys 20115-16 & 2016-17 and copy of bank account statements etc.. The details submitted by the assessee were examined. The case has been selected for scrutiny under CASS. The case has been selected as Limited scrutiny for the reasons of "Cash deposit during demonetization period". The aspect has been verified with the documentary evidences submitted by the assessee to the department and other documentary evidences available. The assessee filed return of income, offering salary income of Rs.1,44,000/- and other source income of Rs.8,23,100/- as commission received. The assessee has not, however submitted any evidentiary material in support of the claim for having received commission income from any principle. The ld. Assessing Officer on perusal of the return of income filed by the assessee for A.Ys 2015-16 and 2016-17, found that the assessee has been regularly declaring commission income for all the preceding previous years. The assessee submitted cash flow statements for the A.Y 2016-17 and 2017-18, wherein commission & brokerage receipts have been debited to cash book. The opening balance of cash as on 01.04.2016 brought forward from A.Y 2016-17, for which, the assessee has filed return of income is Rs.5,05,532/-. The ld. Assessing Officer on Saving Bank account held with Indian Overseas Bank during demonetisation period in SBN to the tune of Rs.12,55,000/-. Since the assessee has been regularly filing return of income declaring commission income and the cash flow statement for all years, the ld. Assessing Officer accepted opening cash balance as on 01.04.2016. The cash balance as on 08.11.2016, as per cash book of the assessee is Rs.10,20,532/-. But, since the assessee has not submitted any cash balance as on 08.11.2016 can only be arrived taking into account the cash balance in hand as on 01.04.2016 and withdrawals made by the assessee from bank accounts till 08.11.2016. The above sum of amounts put together, is arrived at Rs.6,05,532/- ( Cash balance as on 01.11.2016 is Rs.5,05,532/- and withdrawals from bank account is found to be Rs.1,00,000/- till 08.11.2016). The assessee has made cash deposit of Rs.12,55,000/- in old currency during demonetisation period. Hence, balance amount of Rs.6,49,468/- is assessed as the unexplained cash of the assessee, deposited during the demonetisation period u/s 69 of the Act. Aggrieved, assessee preferred an appeal before the ld.CIT(A).
Before the appellate proceedings, the assessee has submitted that the ld. Assessing Officer while determining the cash in hand position as on 08.11.2016 has totally ignored the commission income received till 08.11.2016. To substantiate its claim the assessee has submitted copy of cash book wherein the opening cash in hand as on 01.11.2016 was Rs.11,09,474/- and as on 08.11.2016 it was at Rs.11,15,884/-. However, the ld. CIT(A) observed that the ld. Assessing Officer in his order has specifically mentioned that the cash in hand of the assessee as on 01.11.2016 was Rs.5,05,532/- as per the cash book submitted by him. Whereas before him the assessee has submitted another cash book with opening cash balance as on 01.11.2016 was Rs.11,09,474/-. As per the ld.CIT(A) assessee has not disputed the correctness of the figure mentioned by the ld. Assessing Officer in the assessment order. The ld.CIT(A) further opined that the assessee has not deposited the huge commission received in bank despite having a bank account. The ld. CIT(A) placing reliance on the decision of Hyderabad Bench of the Tribunal in the case of Masheeruddin Ali Khan vs. ITO, Hyderabad (2014) 42 taxmann.com 69 dismissed the appeal of the assessee and affirmed the action of the ld. Assessing Officer. Aggrieved by the order of the ld. CIT(A), the assessee is in appeal before the Tribunal.
Before us, the ld. Counsel submitted that the AO cannot consider the opening balance as on 01.04.2016 as the opening Balance as on 01.11.2016. He further submitted that when the cash book is submitted alongwith the Bank statement and also considering the source and nature of business of the appellant, the AO and CIT(A) are not justified in assuming the figures. He furthermore, submitted that the assessee has already submitted the cash deposited in the Bank as part of the declared income which is evident from the Income Tax Return filed and adding the same as undisclosed by the AO will be amount to tax the same income twice.
Per contra, the ld.DR, Shri ARV Srinivasan, Addl.CIT relied upon the orders of the lower authorities and pleaded for the dismissal of appeal.
We have gone through the rival submissions and perused the record of the appeal file and paper book (PB) filed by the assessee. We have gone through the 6 of PB wherein the opening cash Balance as on 01.04.2016 is 5,05,532/- where as on page 9 of PB the opening cash Balance as on 01.11.2016 is 11,09,474/-. The opening cash Balance as on 08.11.2016 is 11,15,884/-. We also find from the computation of total income (Pg 17 of PB), the Commission and Brokerage-net income-Auto spares-cash is shown as Rs.8,00,000/- and if this commission is taken into consideration the difference will not arise from the remittance during the demonetization Period. Commission receipts month wise were also submitted before the ld.CIT(A) but not considered in proper perspective. We also find that no specific query was raised by the AO about commission receipt. Hence, in the light of the above factual findings we delete the addition.
In result, the appeal of the assessee is allowed.
Order pronounced in open Court on 29th November, 2024 at Chennai.