ACIT Vs Kamatchipuram Vellingiri Jayaraman (ITAT Chennai)
The Income Tax Appellate Tribunal, Chennai, considered the Revenue’s appeal against the order of the Commissioner of Income Tax (Appeals) dated 31.08.2024 for Assessment Year 2017-18. The Tribunal also considered the assessee’s cross objection, condoned the delay of 148 days in filing it after accepting the reasons stated in the affidavit as sufficient cause, and admitted the cross objection for adjudication.
The assessee, an individual, carried on real estate business under the name K.V. Jayaraman Real Estate, hotel business under the name Hotel Cheran, and agricultural activities under the name Palani Farm. The original return of income for Assessment Year 2017-18 declared a loss of Rs.4,48,718. The assessment was reopened under Section 147 to verify the source of investment of Rs.39,42,000 in an immovable property. Pursuant to the notice issued under Section 148, the assessee filed a return declaring nil income and furnished financial statements, profit and loss account, balance sheet and other details during the reassessment proceedings. After examining the material, the Assessing Officer accepted the explanation regarding the source of investment and made no addition on the issue for which the assessment had been reopened.
During the reassessment proceedings, however, the Assessing Officer examined other issues. Fifty per cent of development charges amounting to Rs.10,21,250 were disallowed due to non-production of supporting vouchers. Other expenses amounting to Rs.39,19,696 were also disallowed because supporting vouchers were not produced and the nature of the expenses was not explained. The Assessing Officer further treated Rs.2,93,50,000 credited in the Palani Farm account as unexplained cash credits under Section 68 after concluding that the assessee had failed to satisfactorily explain the source of the credits. The assessment under Sections 143(3) read with 147 was completed by determining total income at Rs.3,38,42,228.
