DEEPALI KAPOOR,HYDERABAD V. ITO., WARD-12(1), HYDERABAD

ITA 1097/HYD/2025

AI Insights

Ms. Deepali Kapoor appealed against the order of the Learned Commissioner of Income Tax (Appeals), which upheld the additions made by the Assessing Officer under section 68 of the Income Tax Act, 1961. The additions pertained to unexplained credits in the assessee's accounts amounting to Rs. 26,29,650 for the Assessment Year 2022-23. The Tribunal found that the Rs. 8,49,650 received from her husband for household expenses was not an income-bearing receipt and thus not subject to section 68. However, the source of the Rs. 17,80,000 addition required further verification, leading to the restoration of this issue to the Assessing Officer.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787387 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2022-2023
• Appeal Filed On: 28-06-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PAWAN KUMAR C HAKRAPANI
• Keywords: Unexplained cash credit; Principle of natural justice
• Section: 143(3); 68; 234B

Judgement Text

" ITA No 1097 of 2025 Deepali Kapoor Page 1 of 7 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ SMC ‘ 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.1097/Hyd/2025 (िनधाŊरण वषŊ/Assessment Year: 2022-23) Ms. Deepali Kapoor Hyderabad PAN:ANNPK2904M Vs. Income Tax Officer Ward 12 (1) Hyderabad (Appellant) (Respondent) िनधाŊįरती Ȫारा/Assessee by: CA Pawan Kumar Chakrapani राज̾ व Ȫारा/Revenue by:: Shri R. Kumaran, Sr. DR सुनवाई की तारीख/Date of hearing: 12/11/2025 घोषणा की तारीख/Pronouncement: 19/11/2025 आदेश/ORDER Per Madhusudan Sawdia, A.M.: This appeal is filed by Ms. Deepali Kapoor (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”) dated 10.06.2025 for the A.Y 2022-23. 2. The assessee has raised the following grounds of appeal: “1. The impugned order of the learned Authorities below in so far as it is against the Appellant is opposed to law, weight of Printed from counselvise.com ITA No 1097 of 2025 Deepali Kapoor Page 2 of 7 evidence, natural justice, probabilities, facts and circumstances of the Appellant’s case. 2. The Appellant denies himself liable to assessed on a total income of Rs. 26,29,650/-, as against the returned income of NIL under the facts and circumstances of the case. 3. Whether the learned Authorities below are justified in making an addition of an amount being Rs. 26,29,650/-, under section 68 of the Act, under the facts and circumstances of the case. 4. Whether the learned Authorities below are justified in making an addition of an amount being Rs. 8,49,650/-, under section 68 of the Act, under the facts and circumstances of the case. 5. Whether the learned Authorities below are justified in making an addition of an amount being Rs. 17,80,000/-, under section 68 of the Act, under the facts and circumstances of the case. 6. The Appellant denies himself liable to be charged to interest under section 234B and 234D of the Income-Tax Act, 1961, under the facts and circumstances of the case. 7. The Appellant craves leave to add, alter, delete or substitute any of the grounds urged above. 8. In the view of the above and other grounds that may be urged at the time of the hearing of the appeal, the Appellant prays that the appeal may be allowed in the interest of justice and equity.” 3. The brief facts of the case are that the assessee filed her return of income for Assessment Year 2022-23 on 28.09.2022, declaring the total income of Rs. Nil. The case of the assessee was selected for Complete Scrutiny through CASS, and accordingly notice under section 143(2) of the Income Tax Act, 1961 (“the Act”) dated 02.06.2023 was issued by the Learned Assessing Officer (“Ld. AO”). During the assessment proceedings, the Ld. AO found a credit of Rs.2,80,00,000/- in the capital account of the assessee. The assessee explained that the amount was received from her Printed from counselvise.com ITA No 1097 of 2025 Deepali Kapoor Page 3 of 7 husband. However, on verification of the husband’s bank account and cross-checking with assessee’s bank account, the Ld. AO found that only Rs.2,62,20,000/- was actually received from the husband, resulting in difference of Rs.17,80,000/-. Accordingly, the Ld. AO made an addition of Rs.17,80,000/- under section 68 of the Act. Further, the Ld. AO noticed that the assessee had received Rs.8,49,650/- from her husband towards household expenditure. In the absence of corroborative evidence, the Ld. AO treated the same also as unexplained credit under section 68 of the Act. Thus, the assessment was completed by Ld. AO under section 143(3) read with section 144B of the Act on 18.03.2024, making a total addition of Rs.26,29,650/- under section 68 of the Act. 4. Aggrieved with the order of the Ld. AO, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) upheld both the additions made by the Ld. AO and dismissed the appeal of the assessee. 5. Aggrieved with the order of the Ld. CIT (A), the assessee is now in appeal before this Tribunal. The Learned Authorized Representative (“Ld. AR”) submitted that only two issues arise out of the grounds of appeal of the assessee i.e. (a) Addition of Rs.8,49,650/- (household expenditure) and (b) Addition of Rs.17,80,000/- (capital account credit difference). As far as the addition of Rs.8,49,650/- (household expenditure) is concerned, the Ld. AR invited our attention to the computation of income of the assessee’s husband placed at page nos. 11 to 15 of the Paper Book, showing that the husband has filed his return of Printed from counselvise.com ITA No 1097 of 2025 Deepali Kapoor Page 4 of 7 income declaring total income of Rs.61,62,136/- during the year under consideration. It was submitted that out of his disclosed income, he contributed Rs.8,49,650/- to his wife (the assessee) for household expenditure. It was argued that since the household expenditure given by a husband to his wife is a routine family arrangement and such receipt is not a credit of an income-bearing nature, it cannot constitute a “sum credited in the books” so as to attract section 68 of the Act. Hence, there is no question of treating such normal day-to-day household support as unexplained credit. The Ld. AR therefore submitted that the addition under section 68 of the Act is wholly unsustainable and liable to be deleted. 6. As regards to addition of Rs.17,80,000/- (capital account credit difference) the Ld. AR invited our attention to the assessee’s bank statement with HDFC Bank placed at page no. 66 of the paper book showing a deposit of Rs.17,55,000/- on 06.01.2022 received from Cyber Optic. He submitted that the assessee had received gross professional receipts of Rs.19,50,000/- from Cyber Optic during the year, which were offered to tax under section 44ADA of the Act. In this regard, our attention was invited to the computation of income of the assessee placed at page nos. 84 to 87 of the paper book, wherein the assessee has offered a total turnover of Rs.19,50,000/- under section 44ADA of the Act. It was accordingly submitted that the difference of Rs.17,80,000/- found credited in the capital account is nothing but part of the gross professional receipts of Printed from counselvise.com ITA No 1097 of 2025 Deepali Kapoor Page 5 of 7 Rs.19,50,000/- already offered to tax. Therefore, the addition is not justified. 7. Per contra, the Learned Departmental Representative (“Ld. DR”) relied on the order of the Ld. AO and the Ld. CIT(A). He prayed to uphold the order of the lower authorities. 8. We have considered the rival submissions and perused the material available on records. With regard to addition of Rs.8,49,650/- (household expenditure), we observe that the assessee received Rs.8,49,650/- from her husband towards day- to-day household expenditure. Such receipts, in our considered view, are not in the nature of income, nor are they “credits” of the type intended to be examined under section 68 of the Act. Household support within a family is a normal and recognized transaction and the amount is not required to be proved like a loan or borrowing. The husband’s income and creditworthiness are not in doubt. More importantly, where there is no “credit” in the nature of income-bearing or capital-forming receipt in the books, the machinery of section 68 of the Act cannot be invoked. In the present case, household expenses given by a spouse for daily living requirements cannot be treated as unexplained cash credit within the four corner of section 68 of the Act. Hence, on the basis of the facts of the present case, we hold that section 68 of the Act has no application to the receipt of household expenditure from husband. Accordingly, the Ld. AO is directed to delete the addition of Rs.8,49,650/-. Printed from counselvise.com ITA No 1097 of 2025 Deepali Kapoor Page 6 of 7 9. With regard to addition of Rs.17,80,000/- (capital account credit difference), the assessee has given three different explanations at three different stages: (a). Before the Ld. AO, the assessee has claimed it to be received from husband, (b). Before the Ld. CIT(A), it is claimed to be out of her fixed deposits, (c). Before the Tribunal, it is claimed to be part of her professional receipts of Rs.19,50,000/- offered under section 44ADA of the Act. 10 Because of these contradictory explanations, the source of the credit requires proper factual verification. The assessee now claims that the source is out of professional receipts. She relies on deposit entries and computation of income. However, whether the credit of Rs.17,80,000/- is actually out of the professional receipts of Rs.19,50,000/-, and whether such receipts are duly reflected in books/records, requires verification of documentary evidence, including bank statements, books of account maintained by the assessee, the details of gross receipts of Rs.19,50,000/-, linkage between the deposit of Rs.17,55,000/- and the credit in capital account. Since the explanation has materially changed and full facts are not verified by lower authorities, in the interest of justice, this issue is restored to the file of the Ld. AO for de novo verification. The assessee shall be given adequate opportunity to submit all relevant material. Printed from counselvise.com ITA No 1097 of 2025 Deepali Kapoor Page 7 of 7 Accordingly, this issue of the assessee is allowed for statistical purposes. 11. In the result, the appeal of the is allowed for statistical purposes. Order pronounced in the Open Court on 19th November, 2025. Sd/- Sd/- (VIJAY PAL RAO) VICE PRESIDENT (MADHUSUDAN SAWDIA) ACCOUNTANT MEMBER Hyderabad, dated 19th November, 2025 Vinodan/sps Copy to: S.No Addresses 1 Ms. Deepali Kapoor, Flat No.411, D Block, Pasha Court Apartments, Punjagutta, Hyderabad 500082 2 Income Tax Officer Ward 12(1) Aayakar Bhavan, Basheer Bagh, Hyderabad 500004 3 Pr. CIT - Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order Printed from counselvise.com "