BASHEER KODUMAYIL ABDULLA,CALICUT vs. ITO,WARD 2(1), KOZHIKODE

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ITA 836/COCH/2023Status: DisposedITAT Cochin25 September 2024Bench: SHRI SATBEER SINGH GODARA (Judicial Member), SHRI AMARJIT SINGH (Accountant Member)5 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal acknowledged that the addition was made in principle but noted that the lower authorities did not consider the assessee's agricultural income. Therefore, the Tribunal reduced the addition to Rs. 18,70,554/-, granting partial relief.

What were the facts?

The assessee's appeal was against an addition of Rs. 28,70,554/- made by the Assessing Officer for unexplained cash deposits. The assessee failed to provide sufficient explanation for the cash flow and the source of the deposited cash.

What were the issues?

Whether the addition for unexplained cash credit is justified without considering the assessee's claimed agricultural income. The adequacy of the explanation provided by the assessee for cash deposits.

Which sections of the Income-tax Act were involved?

Section 69A

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Income Tax Appellate Tribunal, COCHIN BENCH : COCHIN

Before: SHRI SATBEER SINGH GODARA & SHRI AMARJIT SINGH

Hearing: 21.08.2024Pronounced: 25.09.2024

This assessee’s appeal, for assessment year 2017- 2018, arise against the CIT(A)-National Faceless Appeal Centre [in short the “NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/250/2023-24/1056185051(1), dated 18.09.2023, in proceedings u/s.143(3) of the Income Tax Act, 1961 (in short “the Act”).

2 ITA.No.836/COCH./2023 Case called twice. None appears at assessee’s behest. He is accordingly proceeded ex-parte.

2.

Learned DR invited our attention to the CIT(A)-NFAC's lower appellate findings upholding Assessing Officer’s action making unexplained cash addition of Rs.28,70,554/- reading as under :

6.2. I have gone through the assessment order and considered carefully the submission of the appellant made him in this regard. During the assessment proceeding the appellant had himself submitted a cash flow for explaining the sources of cash deposited in his bank account. The Id. AO has just pointed out the incorrectness in cash flow and redrawn it. The appellant could not point out as to how the cash flow redrawn by the Id. AO was incorrect. The appellant has miserably failed to explain and justify that why the cash deposited in the bank should not be a part of outgoing cash in the cash flow. Similarly, the appellant has incorrectly stated that as per recast cash flow, loan repayment of Rs.35,00,000/- and chitty payment of Rs.8,50,000/- were not happened during the year. The Id. AO has successfully demonstrated that how the assessee's submission was 3 ITA.No.836/COCH./2023 incorrect. As per the bank statements collected by the ld. AO from the Chakkittapara Service Co-op Bank by issuing notice u/s 133(6), an amount of Rs.35,00,000/- was transferred on 30/01/2017. The same fact is also certified by the bank authority that the Group deposit amount of Rs.35,00,000/- was transferred to loan account of the appellant on 30.01.2017. In fact, chitty amount received shown in the inflow is directly credited to loan account as loan repayment. As per the chitty statements received from Chakkittapara Service Co-op bank, assessee has paid Rs.4,25,000/- towards chitty account no.0103210105035 and paid Rs.4,25,000/- towards chitty account no.0103210105036 a total of Rs.8,50,000/-. Therefore, appellant's claim that chitty payment was only Rs.3,75,000/- is not correct.

6.3. From the facts of the case, it is clear that the appellant is not able to explain the cash deficit of Rs.28,70,554 as worked out by the Id. AO. This amount represents the cash deposited in the banks by the appellant. The appellant has still no explanation about the source of this cash. Therefore, on the basis of facts of the case as emerged during the assessment proceedings and during the appellate

4 ITA.No.836/COCH./2023 proceedings, I am of considered opinion that the addition made by the Id. AO u/s 69A deserves to be sustained. Accordingly, the all grounds of the appeal on this issue are dismissed and not allowed.”

3.

We have given our thoughtful consideration to the assessee’s pleadings and Revenue’s vehement contentions. We are of the considered view that although there is nothing adverse which could be found in the learned lower authorities action making the impugned addition in principle; the fact however remains that both of them have not even credit of the assessee’s income derived from agricultural sales admeasuring ac.25.00. The assessee has also failed to file all the relevant evidence(s) in support of his agricultural income receipts. Be that as it may, we are of the considered view in these peculiar facts that a lump sum addition of Rs.18,70,554/- only would meet the ends of justice. The assessee gets part relief of Rs.10 lakhs in otherwords. Necessary computation shall follow as per law. Ordered accordingly.

4.

Delay of 18 days in filing the instant appeal is condoned as per assessee’s solemn averments in light of 5 ITA.No.836/COCH./2023 Collector, Land Acquisition vs., MST Katiji [1987] 167 ITR 471 (SC) having settled the law long back that all such technical aspects must make a way for the cause of substantial justice.

4. This assessee’s appeal is partly allowed in above terms.

Order pronounced in the open Court on 25.09.2024.

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