BANDALAPALLI ASHWINI,CHALLAKERE V. INCOME TAX OFFICER, WARD-1, CHITRADURGA

ITA 2301/BANG/2025

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The case involves Ms. Bandalapalli Ashwini, the Assessee, who appealed against the order of the Joint Commissioner of Income Tax (Appeal), Madurai, which confirmed the addition of Rs. 9,00,000 to her income under section 69A of the Income Tax Act, 1961, and the taxation of Rs. 15,00,000 under the head 'income from other sources'. The Assessee had deposited Rs. 15,00,000 in cash during the demonetization period, which she claimed was a cash gift from her grandmother. The Income Tax Officer (ITO) questioned the source of the Rs. 9,00,000 deposit, leading to the addition to her income. The Assessee argued that this amount was part of the cash gift already declared as income from other sources, thus avoiding double taxation. The Income Tax Appellate Tribunal (ITAT) found that the Assessee needed to provide further evidence to substantiate her claim and restored the matter to the ITO for a detailed examination.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 831301 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 14-10-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: REVENUE; GANESH R GHALE
• Assessee Lawyers: SMITHA
• Keywords: Gift
• Section: 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL ‘SMC’ BENCH: BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE – PRESIDENT ITA No. 2301/Bang/2025 Assessment Year : 2017-18 Ms. Bandalapalli Ashwini, Srinivasa Nilaya, 1st Cross, Somuguddu Road, Chitradurga Dist., Challakere, Karnataka – 577 522. PAN: AIOPA7435P Vs. The Income Tax Officer, Ward-1, Chitradurga. APPELLANT RESPONDENT Assessee by : Ms. Smitha, Advocate Revenue by : Shri Ganesh R Ghale - Advocate, Standing Counsel for Revenue Date of Hearing : 16-12-2025 Date of Pronouncement : 20-01-2026 ORDER PER PRASHANT MAHARISHI, VICE – PRESIDENT 1. ITA No. 2301/Bang/2025 is filed by Ms. Bandalapalli Ashwini (the Assessee/Appellant) against the Appellate Order passed by the Joint Commissioner of Income Tax (Appeal), Madurai (the Ld. CIT(A)) for Assessment Year 2017-18 dated 26.08.2025 wherein the appeal filed by the Assessee against the Assessment Order passed u/s. 143(3) of Printed from counselvise.com ITA No. 2301/Bang/2025 Page 2 of 4 the Income Tax Act, 1961 dated 29.08.2019 passed by the Income Tax Officer, Ward-1, Chitra Durga (the Ld. Assessing Officer) was dismissed. Therefore, the Assessee is in appeal. 2. The Assessee is contesting the addition of Rs. 9,00,000/- u/s. 69A of the Act and taxing of Rs. 15,00,000/- under the head income from other sources. 3. Brief facts of the case show that Assessee is an individual who filed her return of income on 09.01.2018 at a total income of Rs. 14,35,730/-. The case was picked up for verification as there were cash deposits during the demonetization period. Notice u/s. 143(2) was issued on 21.09.2018. 4. The Ld. Assessing Officer noted that the Assessee has shown cash deposit of Rs. 15,00,000/- and deposited Rs. 9,00,000/- into her bank account on 15.11.2016. The Assessee offered the cash gift as income under the head income from other sources. The Ld. Assessing Officer questioned the Assessee about the cash deposit of Rs. 9,00,000/- on 29.07.2019 which was not replied to by the Assessee and therefore the Ld. Assessing Officer passed an Assessment Order u/s. 143(3) of the Act on 29.08.2019 making the addition of Rs. 9,00,000/- and assessing the total income at Rs. 23,35,728/-. The Assessee aggrieved with the same preferred appeal before the Ld. CIT(A). 5. Before the Ld. CIT(A) the Assessee submitted that the amount of cash deposit in the bank account is out of the cash gift received of Rs. 15,00,000/-. This income is disclosed by the Assessee as income from other sources and therefore when the same income is already shown as income from other sources and out of that cash sum of Rs. 9,00,000/- is deposited in the bank account of the Assessee in cash, there could not be an addition in the hands of the Assessee. The Ld. CIT(A) did not believe the same and held that mere statement that Assessee has received cash gift of Rs. 15,00,000/- and out of which cash deposit of Rs. 9,00,000/- without any linkage of dates or cash flow statement showing that when gift was received, how it was preserved and how it was deposited and when it was deposited. The benefit of the same cannot be granted to the Assessee. Accordingly, the addition of Rs. 9,00,000/- was confirmed. 6. The Assessee is in appeal before us. The claim of the Assessee is that the Assessee has received a cash deposit of Rs. 15,00,000/- from her grandmother. The amount was received in cash and out of that cash sum of Rs. 9,00,000/- was deposited in the bank account. It was Printed from counselvise.com ITA No. 2301/Bang/2025 Page 3 of 4 stated that the source of the deposit of Rs. 9,00,000/- in the bank account is gift received from the grandmother of the Assessee which has already been offered as income from other sources. Thus, it was claimed that this is double taxation. The Ld. Authorized Representative therefore submitted that addition of Rs. 9,00,000/- has resulted in double addition. 7. The Ld. Departmental Representative, Shri Ganesh R Ghale, Advocate, Standing Counsel for Revenue submitted that there is no source available of Rs. 9,00,000/- cash deposit in the bank account and therefore the addition is made. 8. We have carefully considered the rival contentions and perused the orders of the Ld. lower authorities. The facts show that Assessee has deposited the Rs. 9,00,000/- in her bank account, sources of such cash deposit were stated to be cash gift received by the Assessee from her grandmother of Rs. 15,00,000/- which is shown by the Assessee as her income as income from other sources. We find that if that be the case, the gift received by the Assessee from her grandmother would not be an income chargeable to tax. However, the issue before us is whether the sources of the fund of Rs. 9,00,000/- can be explained by the Assessee correctly by showing cash gift received from her grandmother received in cash of Rs. 15 lakhs. The facts clearly show that there is no evidence produced before the Ld. lower authorities. Further, the Ld. lower authorities did not deny that the cash gift was received from the grandmother of Rs. 15,00,000/- could be the source of cash deposit in the bank account. The addition was made on the grounds that Assessee did not furnish any cash flow, did not provide when gift was received in cash, how the cash was preserved and when the same was deposited. We find that date of cash deposit is available in the Assessment Order. However, details of cash gift received from the grandmother are not available. In view of these facts, we direct the Assessee to show the details of cash received from the grandmother by the Assessee of Rs. 15,00,000/- in cash, if there is no other evidence available with the Assessing Officer that such gift was received is utilized for any other purpose, the Assessee deserves the credit of those Rs. 15,00,000/- received as a gift in cash as source of the sum deposit of Rs. 9,00,000/- in the bank account. In view of these facts, the issue is restored back to the file of the Ld. Assessing Officer with directions to the Assessee to show the amount of cash gift of Rs. 15,00,000/- received from grandmother of the Assessee. The Ld. Authorized Representative has relied upon several judicial precedents before us filed in paper book. However, we direct the Assessee to substantiate the cash gift and thereafter she may be allowed to raise any other Printed from counselvise.com ITA No. 2301/Bang/2025 Page 4 of 4 contentions. This is because there is no documentary evidence available before us in the form of gift deed or confirmation from the donor or any other evidence. 9. Accordingly, Appeal of the Assessee is allowed for statistical purposes. Order pronounced in the open court on 20th January 2026. Sd/- (PRASHANT MAHARISHI) VICE-PRESIDENT Bangalore, Dated, the 20th January 2026. *TNTS* Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. CIT(A) By order Assistant Registrar, ITAT, Bangalore Printed from counselvise.com "