Karnam Rudrapillai Gunaseharan Vs ITO (ITAT Chennai)
The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, dated 04.09.2024, concerning Assessment Year 2017-18. There was a delay of 39 days in filing the appeal. The ITAT Chennai condoned the delay after considering the assessee’s petition and finding reasonable cause.
The assessee, an individual carrying on business as Sai Pooja Agro Farms in broiler integration (poultry), had filed its return on 26.03.2018 declaring total income of Rs.3,00,29,070. During scrutiny, the Assessing Officer noticed cash deposits of Rs.35,52,000 in specified bank notes during the demonetisation period. The assessee had cash balance of Rs.3,26,337 as on 09.11.2016 and explained the balance Rs.32,26,000 as cash received from customers in specified bank notes during the demonetisation period.
The Assessing Officer rejected the explanation and made an addition of Rs.32,26,000 as unexplained money, referring to Section 69A in the quoted assessment order, and charged the amount under Section 115BBE. Penalty proceedings under Section 271AAC were also initiated. The assessee appealed to the CIT(A), which confirmed the addition.
Before the appellate authorities, the assessee submitted that the cash deposits arose from ordinary business transactions and were recorded in its books. It stated that it had furnished sales details, party ledgers, bank statements, cash-deposit details, collection receipts, and customer addresses with PAN particulars. It also relied on the Specified Bank Notes (Cessation of Liabilities) Act, 2017, particularly Sections 2(1)(a), 3 and 5, to contend that specified bank notes could be used until the appointed day, 31.12.2016.
