DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(2), BANGALORE V. KOGOD BASAVARAJU JAYACHANDRA, HASSAN

MA 51/BANG/2025

AI Insights

The case revolves around a Miscellaneous Petition filed by the Revenue against a previous Tribunal Order that deleted an addition of Rs.1,92,58,000 made by the AO. This addition was initially claimed to be unexplained cash deposits under section 69A of the Income Tax Act. The Revenue contended that the assessee failed to explain the source of these deposits, which were admitted during survey proceedings by Shri D. S. Nandish, an associate of the assessee. The Tribunal, however, upheld the deletion of the addition, stating that the issue was not covered in the reasons for the notice under section 143(2) and that the cash deposits were not part of the transactions scrutinized under the limited scrutiny provisions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772813 (ITAT-BANGALORE)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-08-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: LIKITH PATEL

Judgement Text

"IN INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH : BANGALORE BEFORE SHRI. LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AND SHRI. SOUNDARARAJAN K, JUDICIAL MEMBER MP No.51/Bang/2025 [in ITA No.1618/Bang/2024] Assessment Year : 2017-18 DCIT, Central Circle – 2(1), Bangalore. Vs. M/s. Kogod Basavaraju Jayachandra, 1, Gulagalale Estate, Bhage Post, Sakaeshpura Taluk, Hassan Gulagalale Estate – 573 214. PAN : AEWPJ 4330 E Appellant Respondent Assessee by : Shri. Likith Patel, Advocate Revenue by : Shri. Ballusamy N, JCIT(DR)(ITAT), Bangalore. Date of hearing : 08.08.2025 Date of Pronouncement : 28.08.2025 ORDER Per Laxmi Prasad Sahu, Accountant Member : ThisMiscellaneous Petition (MP) has been filed by the Revenue against ITA No.1618/Bangalore/2024, Order dated 26.05.2025, passed by the Co- ordinate Bench of the Tribunal, regarding deletion of addition made by AO towards unexplained cash deposit under section 69A of the Act of Rs.1,92,58,000/- cash deposited in Bharat Co-operative Bank and seek to recall the Order passed by the Bench in the above appeal. 2. The learned DR submitted that the Hon’ble Bench has wrongly deleted addition made by the AO under section 69A of the Act of Rs.1,92,58,000/- since in this case source of cash deposited was not explained by the assessee and the CIT(A) has also dealt the issue. During the survey proceedings, Printed from counselvise.com MP No.51/Bang/2025 [in ITA No.1618/Bang/2024] Page 2 of 3 Shri D. S. Nandish has admitted that all the cash deposits of Rs.1,92,58,000/- were deposited into the bank account of the assessee from unaccounted source of income and offered cash deposits as additional income in the respective case. During the course of proceedings, assessee has admitted that Shri. D. S. Nandish had carried out certain transactions on his behalf and had accepted to include these transactions in is personal assessment. The same issue of cash deposit was covered in the cause selection as one of the reasons in the scrutiny. Hence, there was no requirement of converting this case from complete scrutiny to limited scrutiny. However, Shri. D. S. Nandish did not offer cash deposit in return of income. Neither the assessee disclosed this cash deposits in the return of income and the ld. DR sought for recalling of the Order. 3. On the other hand, the learned Counsel for the assessee relied on the Order of the Co-ordinate Bench passed by the Tribunal. 4. Considering the rival submissions, the very basis for filing this MP is deletion of Rs.1,92,58,000/- added by the AO as unexplained cash deposit under section 69A of the Act in the assessee’s bank account by D. S. Nandish from unaccounted source in Bharat Co-Operative Bank Ltd Mumbai. We have gone through the Order passed by the Co-ordinate Bench, we noted that the case was selected for limited scrutiny for verification on 2 reasons (i) agricultural income (ii) cash deposited during demonetization period. During the course of assessment proceedings, the AO observed that the assessee has deposited cash during demonetization period of Rs.15,11,000/- in his 4 bank accounts which is mentioned in para No.4 of the TAssessment Order. However, the addition made by AO under section 69A of the Act is related to the cash deposited in Bharat Co-operative Bank Ltd., but there is no observation of the AO that the assessee has deposited cash during demonetization period in Bharat Co-operative Bank ltd. The AO has made Printed from counselvise.com MP No.51/Bang/2025 [in ITA No.1618/Bang/2024] Page 3 of 3 addition which is not covered in the reasons recorded for issue of notice under section 143(2) of the Act and we have dealt with the reason for deletion of addition made by the AO in our Order at Para No.42. The AO has not pointed out that cash was deposited in the assessee’s account by D. S. Nandish during the demonetization period as per para No. 04 of his order. Accordingly, there is no error in the Order of the Co-ordinate Bench. Therefore, MP filed by the Revenue is dismissed. 5. In the result, Miscellaneous Petition filed by the Revenue isdismissed. Pronounced in the court on the date mentioned on the caption page. Sd/- Sd/- (SOUNDARARAJAN K) (LAXMI PRASAD SAHU) Judicial Member Accountant Member Bangalore, Dated : 28.08.2025. /NS/* Copy to: 1. Appellant 2. Respondent 3. Pr.CIT4.CIT(A) 5. DR, ITAT, Bangalore. By order Assistant Registrar ITAT, Bangalore. Printed from counselvise.com "