ITAT Chennai: Appeal Partially Allowed, Cash Deposit Addition Revised

The ITAT Chennai partially allowed the appeal, directing the deletion of a portion of the cash deposit addition while sustaining the rest for taxation. The interest calculation under sections 234A & 234B was also to be revised by the AO.

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Issues:
1. Jurisdiction regarding notice u/s 143(2)
2. Addition of cash deposit as income from other sources

Jurisdiction regarding notice u/s 143(2):
The appeal raised concerns about the assessment u/s 144 without issuing notice u/s 143(2) despite the return of income being filed. The appellant did not press these grounds, leading to their dismissal.

Addition of cash deposit as income from other sources:
The dispute revolved around the AO's addition of a cash deposit of Rs.7.70 lakhs as income from other sources u/s.69A and taxing it under special rate of tax u/s.115BBE. The appellant, an agriculturist, presented evidence of land holdings and income certificates to establish agricultural income. The CIT(A) rejected the explanation, citing lack of commercial activity and absence of maintained books of accounts. However, upon review, the ITAT acknowledged the appellant's agricultural activities, estimating an income of Rs.4.5 lakhs per annum. Recognizing the cash accumulation possibility, the ITAT directed the deletion of Rs.5 lakhs from the addition, sustaining Rs.2.70 lakhs for taxation under section 115BBE.

Charging of interest u/s.234A & 234B:
The issue of charging interest u/s.234A & 234B was deemed consequential, with the AO instructed to recompute the interest accordingly.

In conclusion, the ITAT Chennai partially allowed the appeal, directing the deletion of a portion of the cash deposit addition while sustaining the rest for taxation. The interest calculation under sections 234A & 234B was also to be revised by the AO.

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