Madras High Court
Logamaheshwara vs The Income Tax Officer on 2 September, 2024
Author: C.Saravanan
Bench: R.Suresh Kumar, C.Saravanan
T.C.A.No.172 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 02.09.2024
CORAM
THE HONOURABLE MR.JUSTICE R.SURESH KUMAR
and
THE HONOURABLE MR.JUSTICE C.SARAVANAN
T.C.A.No.172 of 2024
Logamaheshwara ... Appellant
Vs.
The Income Tax Officer,
Ward-11(1),
Trichengode. ... Respondent
PRAYER : Tax Case Appeal filed under Section 260 A of the Income Tax Act,
1961, against the order of the Income Tax Appellate Tribunal 'A' (SMC) Bench,
Chennai dated 06.03.2024 in I.T.A.No.1312/CHNY/2023 for the assessment
year 2009-10.
For Appellant : Mr.I.Dinesh
For Respondent : Mr.J.Narayanaswamy
Senior Standing Counsel
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1/8
T.C.A.No.172 of 2024
JUDGMENT
(Judgment of the Court was delivered by C.SARAVANAN,J.)
This tax appeal is directed against the impugned order dated 06.03.2024
passed by the Income Tax Appellate Tribunal in ITA.No.1312/CHNY/2023 for
the assessment year 2009-10.
2. By the impugned order, the appeal filed by the Appellant in
ITA.No.1312/CHNY/2023 has been partly allowed and partly rejected.
3. Operative Portion of the impugned order reads as under:-
“7. We have heard both the parties, perused materials
available on record and gone through orders of the
authorities below. Although, the appellant claims to
have earned agricultural income, but no evidence
has been filed before the Assessing Officer and Id.
CIT(A). Even before us, the Ld. Counsel for the
assessee has expressed his inability to submit any
details with regard to extent of land holding,
agricultural activities carried out by assessee and
income generated from agricultural activities. The
appellant has also failed to prove money lending
business activities with necessary evidences.
Therefore, we are of the considered view that the
assessee could not furnish sufficient evidences
before the Assessing Officer and the Id. CIT(A) to
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explain source for cash deposits, except stating that
he was having opening cash in hand at Rs.
9,00,000/- and source for cash deposits is out of
opening cash in hand and realization of sundry
debtors. At the same time, the Assessing Officer and
the Id. CIT(A) could not adduce any reasons for not
considering the explanation of the assessee with
regard to opening cash in hand of Rs. 9,00,000/-.
Although, the appellant could not file necessary
evidences, the possibility of keeping opening cash
in hand out of agricultural income declared for last
two financial years cannot be ruled out. The
assessee has filed ITRs for last two financial years
and as per ITRs filed by the assessee, the assessee
has declared about Rs. 6,00,000/- agricultural
income for two assessment years. The assessee has
not declared any other income in the return of
income filed for last two financial years. ars.
Assuming for a moment, the assessee derives
agricultural income at Rs. 6,00,000/-, it cannot be
said that the assessee has saved entire agricultural
income without spending for his day-to-day
expenses. Therefore, considering the amount of
agricultural income declared by the assessee for
last two financial years, we are of the considered
view that a reasonable amount can be attributable
towards savings, which can be kept in cash balance.
Therefore, out of total agricultural income declared
by the assessee, we consider a Sum of Rs.
2,00,000/- towards expenses of the assessee for two
years and balance sum of Rs. 4,00,000/- is
available with the assessee in the form of cash in
hand which can be considered as source for cash
deposits. Therefore, we direct the Assessing Officer
to allow relief to the extent of Rs. 4,00,000/-
towards cash deposits into bank account in
addition to relief already given by the Id. CIT(A).
For balance cash deposits, the assessee could not
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adduce any evidence. Therefore, we sustain
additions made by the Assessing Officer and
sustained by the Id. CIT(A). To sum up, out of total
additions sustained by the Id. CIT(A) of Rs.
31,60,956/-, the assessee gets relief of Rs.
4,00,000/- and balance amount of Rs. 27,60,956/-
has been confirmed”.
8. In the result, appeal filed by the assessee is partly
allowed.
4. In return of Income filed by the appellant for the assessment year
2017-18 on 06.03.2018, the appellant had declared an income of Rs.3,75,350/-
and an agricultural income of Rs.50,000/-.
5. The assessment for Assessment Year 2017-2018 was completed on
27.12.2019 under Section 143(3) of the Income Tax Act, 1961 by treating
cash deposits of Rs.36,34,071/- was made by the appellant during
demonetisation in 2016 as “unexplained income” under Section 69A of the
Income Tax Act, 1961.
6. The case of the appellant is that the proceedings initiated pursuant to
the notice under Section 143(2) of the Income Tax Act, 1961 dated 21.09.2018
and further notice dated 07.08.2019 under Section 142(1) and 11.10.2019
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under Section 142(1) of the Income Tax Act, 1961 were confined to source of
cash deposits made during the demonetization period and therefore inclusion of
entire cash deposits as “unexplained income” of the Appellant was
unwarranted.
7. The appellant relied on the decision of the Hon'ble Division Bench of
the Andhra Pradesh High Court in the case of Commissioner of Income Tax
VI, Hyderabad vs. Purushottam Jhawar, (2013) 40 taxmann.com 533
rendered in the context of Section 158 BB of the Income Tax Act, 1961as it
stood then the decision of the Allahabad High Court in Commissioner of
Income Tax (Central), Kanpur vs. Fertilizer Traders, (2014) 42 taxmann.
Com 476 and that of this High Court in Principal Commissioner of Income
Tax, Central 1, vs. A.Anbukkannan, Tax Case Nos.216 & 217 of 2019 dated
04.03.2019
8. We have considered the arguments advanced by the learned counsel
for the appellant. As such, no questions of law much-less any substantial
questions of law arises for our consideration in this appeal. Therefore, this tax
appeal is without any merits. The dispute relates to cash deposits made by the
Assessment during demonetisation which was treated as “unexplained income”
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of the appellant. We also do not find any infirmity in the impugned order
passed by the Income Tax Appellate Tribunal.
9. Therefore, this tax appeal is liable to be dismissed. It is accordingly
dismissed. No costs.
(R.S.K., J.) (C.S.N.,
J.)
02.09.2024
NCC : Yes / No
Index : Yes / No
Speaking Order : Yes / No
kkd
To
1. The Income Tax Officer,
Ward-11(1),
Trichengode.
2. The Income Tax Appellate Tribunal
'A' (SMC) Bench, Chennai.
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R.SURESH KUMAR, J.
AND
C.SARAVANAN, J.
kkd
https://www.mhc.tn.gov.in/judis
02.09.2024
https://www.mhc.tn.gov.in/judis
