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2025 Supreme(Online)(ITAT) 4440
INCOME TAX APPELLATE TRIBUNAL (CHENNAI BENCH)
Shri George George K, VP
Shri Natarajan Maheswaran – Appellant
Versus
The Income Tax Officer – Respondent
Income Tax Appeal/ITA No.: 1062/CHNY/2025
For the Appellants/Petitioners: Shri R. Vijayaraghavan
For the Respondents: Shri C.P. Solomon
The court ruled that the appellant satisfactorily supported their claims regarding cash deposits, warranting the reversal of disallowed amounts.
Headnote:(A) Income Tax Act, 1961 - Section 68 - Assessment Year 2015-16 - Disallowance of cash deposit - The issue revolves around the confirmation of a cash deposit addition made by the AO. The FAA confirmed the addition, citing lack of credible evidence. The appellant explained the source as a loan return, but the FAA found insufficient documentation to support claims. (Paras 2-5)
(B) Credibility of Evidence - The appeal hinges on whether the appellant satisfactorily explained the source of cash deposit; the court iterated the necessity for reliable documentation. Findings based on balance sheets and advance receipts were crucial. (Paras 6-7)
Facts of the case:
The appellant filed for income of Rs.3,37,940/- while the AO challenged a cash deposit of Rs.8,00,000/-. The verification raised issues about the cash deposit origin and credibility of claimed documents.
Findings of Court:
The evidence submitted by the appellant regarding the source of cash was deemed adequate to contest the disallowance of Rs.5,00,000/-.
Issues: Was the First Appellate Authority justified in sustaining the addition of Rs.5,00,000/- under sec. 68 of the Act?
Ratio Decidendi: The court found that the appellant provided sufficient evidence regarding the source of funds, questioning the FAA's prior disallowance.
Result: Appeal allowed.
| Table of Content |
|---|
| 1. the appeal concerns the legitimacy of a cash deposit addition under income tax regulations. (Para 1 , 2) |
| 2. the appellant's documentation was scrutinized to determine the source of cash deposits and validity of the claims. (Para 3 , 4 , 5) |
| 3. court observed that the appellate body needed credible evidence for upholding cash disallowances. (Para 6 , 7) |
| 4. the appellant successfully justified cash deposits, hence the appeal should be allowed. (Para 8) |
| 5. final ruling in favor of the appellant reversing prior disallowance. (Para 9 , 10) |
BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT आयकर अपील सं./ ITA No.: 1062/CHNY/2025 िनधा(cid:6981)रण वष(cid:6981)/Assessment Year: 2015-16 Shri Natarajan Maheswaran, The Income Tax Officer, 2/2/1A, East Street, Vs. Ward 1, Valajanagaram, Perambalur.
Ariyalur District – 621 704.
PAN: BMOPM 0744A (अपीलाथ(cid:7278)/Appellant) ((cid:7079)(cid:7004)यथ(cid:7278)/Respondent)
अपीलाथ(cid:7278) क(cid:7409) ओर से/Appellant by : Shri R. Vijayaraghavan, Advocate (Through Virtual Mode)
(cid:7079)(cid:7004)यथ(cid:7278) क(cid:7409) ओर से/Respondent by : Shri C.P. Solomon, JCIT सुनवाई क(cid:7409) तारीख/Date of Hearing : 24.06.2025 घोषणा क(cid:7409) तारीख/Date of Pronouncement : 01.07.2025 आदशे / O R D E R This appeal filed at the instance of the assessee is directed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 11.03.2025, passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is
2015-16.
2. The solitary issue that is raised is whether the First Appellate Authority (FAA) is justified in confirming the addition made by the AO of Rs.5,00,000/- u/s.68 of the Act.
3. Brief facts of the case are as follows: The assessee is an individual. For the assessment year 2015-16, the return of income was filed declaring income of Rs.3,37,940/-. Based on the information with the Department that assessee had deposited cash of Rs.8,00,000/- in his bank account, assessment was reopened by issuing notice u/s.148 of the Act. The assessment was completed vide order dated 12.03.2022 u/s.147 r.w.s.144B of the Act. In the said assessment order, the AO made addition of Rs.5,00,000/- being cash deposit for which the assessee had explained the source as return of advance which was disbelieved by the AO. As regards the source of cash deposit of Rs.3,00,000/-, the AO accepted the assessee’s submission that same was received from his wife.
4. Aggrieved by the assessment completed u/s.147 r.w.s.144B of the Act, the assessee filed appeal before the FAA. The FAA confirmed the view taken by the AO. The relevant finding of FAA read as follows:-
5.3. The appellant in the grounds of appeal and written submissions has stated that he has given advance totaling to Rs.6,75,400/- to one Sri M.Pugazhenthi on different dates during the FY 2013-14 for purchase of property. However, since the deal was not materialized, the same was returned to the appellant during the FY 2014-15 which was deposited into his own account and an amount of Rs.5,00,000/- was gifted to his sister. The appellant filed confirmation letter from the person Sri M.Pugazhenthi wherein he stated that an amount of Rs.6,75,400/- was received and returned to the appellant. The appellant further claimed that the advance was shown in the Audited balance sheet at 31.03. 2014. I have perused the written submissions, confirmation letter, Balance Sheet and information available on record. The appellant has not furnished any details regarding the details of land purchase viz. Area, Location of the property, proposed value etc. except merely stating that he wished to buy land from the seller Sri M. Pugazhenthi. Further, there is no credible documentary evidence for the receipt of advance totaling to Rs.6,75,400/- except confirmation letter from the seller. There is no proper reason which was brought on record either during the assessment proceedings or at the appeal pr
