ATCHUTHA VENKATA SREENIVAS RAO,RANGAREDDY V. ACIT., CENTRAL CIRCLE-2(1), HYDERABAD

ITA 1414/HYD/2025

AI Insights

The case involves Atchutha Venkata Sreenivasa Rao, who appealed against the order of the Learned Commissioner of Income Tax (Appeals)-12, Hyderabad, which confirmed the addition of Rs.1,83,600 to his income for the Assessment Year 2020-21. This addition was based on a seized document during a search operation under section 132 of the Income Tax Act, 1961, which allegedly indicated the assessee's involvement in a cash transaction. The Tribunal examined the authenticity of the seized document and the ownership of the property at the time of the alleged transaction, ultimately finding no substantive evidence to support the addition made under section 69A of the Act.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 826922 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2020-2021
• Appeal Filed On: 30-08-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PRAVEEN KUMAR
• Keywords: Search and seizure
• Section: 142(1); 132

Judgement Text

" ITA No 1414 of 2025 Atchutha Venkata Sreenivas Rao Ranga Reddy Page 1 of 7 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ DB A ‘ Bench, Hyderabad Įी ͪवजय पाल राव, उपाÚ य¢ एवं Įी मधुसूदन सावͫडया, लेखा सदè य क े सम¢ । Before Shri Vijay Pal Rao, Vice-President A N D Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA No.1414/Hyd/2025 (िनधाŊरण वषŊ/Assessment Year: 2020-21) Atchutha Venkata Sreenivasa Rao, Ranga Reddy PAN:ADGPA1171P Vs. Assistant Commissioner of Income Tax Central Circle 2(1) Hyderabad (Appellant) (Respondent) िनधाŊįरती Ȫारा/Assessee by: CA Praveen Kumar राज̾ व Ȫारा/Revenue by:: Smt. Helen Ruby Jesindha, Sr. DR सुनवाई की तारीख/Date of hearing: 22/12/2025 घोषणा की तारीख/Pronouncement: 07/01/2026 आदेश/ORDER Per Madhusudan Sawdia, A.M.: This appeal is filed by Atchutha Venkata Sreenivasa Rao (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals)-12, Hyderabad (“Ld. CIT(A)”) dated 18.07.2025 for the A.Y 2020-21. Printed from counselvise.com ITA No 1414 of 2025 Atchutha Venkata Sreenivas Rao Ranga Reddy Page 2 of 7 2. The assessee has raised the following grounds of appeal: Printed from counselvise.com ITA No 1414 of 2025 Atchutha Venkata Sreenivas Rao Ranga Reddy Page 3 of 7 3. The brief facts of the case are that the assessee is an individual who filed his return of income for the Assessment Year 2020-21 on 04.11.2020, declaring a total income of Rs.5,02,000/-. A search and seizure operation under section 132 of the Income Tax Act, 1961 (“the Act”) was conducted on 23.03.2021 in the case of Spectra Group of Companies. During the course of the said search, an “agreement of sale” was found and seized, which indicated that the assessee along with twelve other persons had allegedly entered into an agreement of sale dated 31.12.2019. On the basis of the said seized document, proceedings under section 153C of the Act were initiated in the case of the assessee and notice under section 153C was issued on 12.07.2023. Subsequently, notice under section 142(1) of the Act dated 23.10.2024 was issued requiring the assessee to file his return of income, in response to which the assessee requested that the original return filed earlier may be treated as the return filed in response to the notice. Thereafter, notice under section 143(2) of the Act was issued to the assessee. From the seized document, the Learned Assessing Officer (“Ld. AO”) observed that cash of Rs.60 lakhs was stated to have been paid by the vendee to the vendors and the assessee’s share therein was worked out at Rs.1,83,600/- being 3.06%. The Ld. AO called upon the assessee to explain the said alleged cash receipt. Not being satisfied with the explanation furnished by the assessee, the Ld. AO treated the amount of Rs.1,83,600/- as unexplained money under section 69A of the Act and added the same to the total income of the assessee. Printed from counselvise.com ITA No 1414 of 2025 Atchutha Venkata Sreenivas Rao Ranga Reddy Page 4 of 7 Accordingly, the assessment was completed by the Ld. AO under section 153C of the Act on 25.02.2025 by making an addition of Rs.1,83,600/- under section 69A of the Act and determining the total income of the assessee at Rs.6,85,600/-. 4. Aggrieved with the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A), after considering the submissions of the assessee, was not convinced and dismissed the appeal, confirming the addition made by the Ld. AO. 5. Aggrieved with the order of the Ld. CIT (A), the assessee is in further appeal before the Tribunal. The learned Authorised Representative (“Ld. AR”) invited our attention to page nos. 9 to 18 of the paper book No. I and submitted that the seized “agreement of sale” does not bear the signature of any of the alleged vendors, including the assessee. It was contended that the assessee has never executed the alleged agreement of sale and has also never received any cash from the Spectra Group. The Ld. AR further submitted that although the seized document mentions the date of execution as 31.12.2019, the assessee was not even the owner of the property as on that date. In this regard, he drew our attention to the registered sale deed placed at page nos. 9 to 23 of the paper book No. II, which shows that the assessee purchased the property only on 30.01.2020, i.e., subsequent to the date mentioned in the seized document. The Ld. AR also invited our attention to the encumbrance certificate placed at page Printed from counselvise.com ITA No 1414 of 2025 Atchutha Venkata Sreenivas Rao Ranga Reddy Page 5 of 7 no.1 of the paper book No. II, which clearly evidences that the property was registered in favour of the assessee only on 30.01.2020. It was submitted that even assuming, without admitting, that the seized document exists, the sale contemplated therein has never been acted upon and the property was never transferred to the Spectra Group. Further, the Ld. AR drew our attention to the registered sale deed placed at page nos. 24 to 44 of Paper Book No. II and demonstrated that the property was ultimately sold by the assessee to a third party, namely, Shri Karnati Ramya Teja, on 21.12.2024. He also relied upon the encumbrance certificate placed at page nos.1 to 8 of Paper Book No. II, which corroborates the registration of the property in favour of the said purchaser on 21.12.2024. It was further contended that there is no material brought on record by the Revenue to establish that the assessee had actually received any cash from the Spectra Group. Finally, the Ld. AR submitted that in the absence of any signature on the seized document, absence of ownership of the property on the alleged date of execution, and in the absence of any evidence of actual receipt of cash, the addition under section 69A of the Act is wholly unsustainable and liable to be deleted. 6. Per contra, the Learned Departmental Representative (“Ld. DR”) relied upon the orders of the lower authorities and the seized document and submitted that the addition has been rightly made on the basis of incriminating material found during the course of search. Printed from counselvise.com ITA No 1414 of 2025 Atchutha Venkata Sreenivas Rao Ranga Reddy Page 6 of 7 7. We have heard the rival submissions and perused the material available on record. We have also gone through the seized document i.e. “agreement of sale” placed at page nos. 9 to 18 of the paper book No. I. On perusal of the same, we find that the alleged “agreement of sale” does not bear the signature of the assessee or any of the alleged vendors. In the absence of signatures, the execution of the said document itself remains unsubstantiated. We further note that the seized document mentions the date of execution as 30.12.2019. However, on perusal of the registered sale deed (page no. 9 to 23 of the Paper Book No. II) and the encumbrance certificate (page nos.1 to 8 of the Paper Book No. II) placed on record, it is evident that the assessee acquired ownership of the property only on 30.01.2020. Therefore, on the date mentioned in the seized document, the assessee was not the owner of the property in question. We also find force in the submission of the Ld. AR that the alleged transaction with the Spectra Group has never materialised. On the contrary, the property has ultimately been sold by the assessee to a third party, namely Shri Karnati Ramya Teja, on 21.12.2024, as evidenced by the registered sale deed placed at page nos. 24 to 44 of Paper Book No. II. The encumbrance certificate placed at page nos.1 to 8 of Paper Book No. II also corroborates the said factual position. We further observe that the Revenue has not brought on record any cogent material to establish that the assessee has actually received any cash from the Spectra Group. Mere reference to an alleged cash payment in Printed from counselvise.com ITA No 1414 of 2025 Atchutha Venkata Sreenivas Rao Ranga Reddy Page 7 of 7 an unsigned seized document, without any corroborative evidence of actual receipt, is not sufficient to sustain an addition under section 69A of the Act. 8. In view of the above factual and legal position, we are of the considered opinion that the addition of Rs.1,83,600/- made under section 69A of the Act is not sustainable. Accordingly, we direct the Ld. AO to delete the said addition. 9. Since we have allowed the appeal of the assessee on merits, we refrain from adjudicating the legal grounds raised by the assessee, which are kept open. 10. In the result, the appeal of the assessee is allowed. Order pronounced in the Open Court on 7th January 2026. Sd/- Sd/- (VIJAY PAL RAO) VICE PRESIDENT (MADHUSUDAN SAWDIA) ACCOUNTANT MEMBER Hyderabad, dated 7th January 2026. Vinodan/sps Copy to: S.No Addresses 1 ATCHUTHA SREENIVASA RAO. VENKAТА 11-6-400/1/18, Cherukuthota colony, Saroornagar, Saroornagar S.O., K.V. Rangareddy - 500035 2 Assistant Commissioner of Income Tax Centra; Circle 2(1) Aayakar Bhavan, Hyderabad 500004 3 Pr. CIT – Central, Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order Printed from counselvise.com "