ITA Nos. 2661 and 2660 Chny 2024

Parties Involved

Facts Summary

The assessee, Natarajan, is the Managing Director of Shri Dhanlakshmi Spintex Pvt. Ltd. and is also engaged in the business of commission agency involving the purchase and sale of yarn and wind power. For the Assessment Year 2021-22, the assessee filed the return of income on 18.12.2021, declaring a total income of Rs.58,98,850/-, and duly paid the tax thereon. The return was processed u/s. 143(1) of the Income-tax Act, accepting the returned income. Subsequently, the case was selected for scrutiny and a notice u/s. 143(2) dated 08.12.2022 was issued. In response, the assessee submitted a detailed reply vide letter dated 15.12.2022, which was duly acknowledged by the Assessing Officer on 16.12.2022. Thereafter, the assessee was surprised to receive an assessment order u/s. 143(3) dated 30.12.2022, alleging that a summons u/s. 131 had been issued to verify certain transactions allegedly found during a search conducted in the case of Shri Ganesh Saravanakumar, and that the assessee had failed to respond to the same. The assessment order further records that a show cause notice had been issued calling upon the assessee to explain the source of alleged cash payments of Rs.6 crores stated to be “on-money” and why the same should not be taxed as unexplained money u/s.69A. On the premise that the assessee did not respond to the show cause notice, an order dated 30.12.2022 was passed making an addition of Rs.6,00,00,000/- as unexplained investment u/s.69 r.w.s 115BBE.…

Legal Issues

• 1. Whether the addition of Rs.6,00,00,000/- made by the Assessing Officer is justified?
• 2. Whether the penalty of Rs.1,50,00,000/- levied u/s.271D is sustainable?

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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