GARIMELLA VENKATA APPALA SARMA,VISAKHAPATNAM V. INCOME-TAX OFFICER, WARD (INTERNATIONAL TAXATION), VISAKHAPATNAM

SA 16/VIZ/2025

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The case involves Garimella Venkata Appala Sarma, an NRI, who faced an outstanding tax demand of Rs.2,26,338,439/- from the Income Tax Officer, Ward (International Taxation), Visakhapatnam. The demand included additions under section 69A of the Income Tax Act, 1961, for unexplained deposits in the assessee's bank account, which were claimed to be salary remittances from Saudi Arabia and maturity amounts from earlier fixed deposits. The Tribunal considered the explanations and evidence provided by the assessee, including bank transaction details, and found merit in the assessee's arguments, leading to the decision to stay the recovery of the demand pending the appeal's outcome.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472562 (ITAT-VISAKHAPATNAM)
• Appeal Type: Stay Application
• Pronouncement Date: 04-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA VILLURI
• Assessee Lawyers: A. ARUNA
• Keywords: Transfer pricing; International transaction; Salary income; Application of stay
• Section: 69A; 234B; 2

Judgement Text

" आयकर अपीलीय अधिकरण, धिशाखापटणम पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Visakhapatnam Bench, Visakhapatnam Before Shri Vijay Pal Rao, Vice President and Shri Balakrishnan S., Accountant Member SA No.16/Viz/2025 (Arising out of ITA No.149/Viz/2025) (निर्धारण वर्ा/Assessment Year: 2018-19) Garimella Venkata Appala Sarma Visakhapatnam [PAN :ANPPG5223K] Vs. Income Tax Officer, Ward (International Taxation) Visakhapatnam (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Smt.A.Aruna, AR रधजस् व द्वधरध/Revenue by: Dr.Aparna Villuri, DR सुिवधई की तधरीख/Date of Hearing: 04/04/2025 घोर्णध की तधरीख/Date of Pronouncement: 04/04/2025 आदेश / ORDER PER. VIJAY PAL RAO, VICE PRESIDENT : By way of this stay application, the assessee is seeking stay against the recovery of outstanding demand of 1,81,10,739/-. 2. The learned AR of the assessee has submitted that the assessee is an NRI and earning salary income from Saudi Arabia, which is not taxable in India. The Assessing Officer (“the AO”) has made addition of Rs.1,13,53,700/- u/s 69A of the 2 SA No.16/Viz/2025 Garimella Venkata Appala Sarma Income Tax Act, 1961 (“the Act”), on account of unexplained fixed deposit in the bank account. The total demand raised by the AO is Rs.2,26,338,439/-, comprising of interest u/s 234A of Rs.66,65,732/- and u/s 234B of Rs.71,91,974/-. The learned counsel has pointed out that out of total deposit of Rs.1.13 crores, a sum of Rs.86 lakhs is a remittance by the assessee as salary income and balance of Rs.45 lakhs is maturity amount of earlier fixed deposit. Therefore, the addition made by the AO is highly unjustified and arbitrary, when the assessee has explained the source of entire deposit, which is not an income assessable to tax in India. She has further submitted that the assessee has already paid an amount of Rs.45,27,700/- out of total demand of Rs.2.26 crores, which is 20% of the total demand. Thus, the learned AR has submitted that the assessee has a good prima facie case on merits and the recovery of outstanding demand of Rs.1,81,10,739/- be stayed till the disposal of the appeal of the assessee. 3. On the other hand, the Ld.DR has submitted that when the assessee has made a fixed deposit of more than Rs.1.13 crores, then there is no financial problem for making payment of outstanding demand. She has opposed to the stay of the recovery of the outstanding demand. 4. We have considered the rival submissions and carefully gone through the relevant material available on record. The AO 3 SA No.16/Viz/2025 Garimella Venkata Appala Sarma has made addition of Rs.1,13,53,700/- u/s 69A of the Act towards unexplained deposit in the bank account of the assessee. The assessee is an NRI and explained the source of deposit as salary income from Saudi Arabia remitted through NRE account as well as maturity of earlier fixed deposits. The assessee along with Form No.35 has also given the transaction details of deposits / fixed deposits in the bank account. From the details of the bank transactions, it appears that all these transactions are through banking channel, either by cheque or NEFT or inter bank transfer. Thus, it is clear that the assessee has a good arguable case on merits when the salary income of the assessee from outside India is claimed as not taxable in India and the rest of the fixed deposit is nothing but maturity amount of the earlier deposits. The assessee has already paid a sum of Rs.45,28,000/- vide challan dated 22.03.2025, which is 20% of the total demand raised by the AO. The appeal of the assessee is now listed for hearing on 08.04.2025. Accordingly, under the facts and circumstances of the case, we are of the considered opinion that the assessee has made out a case for grant of stay for a period 60 days or till the disposal of the appeal, whichever is earlier. The AO is directed not to take any coercive action to recover the outstanding demand for a period of 60 days or till the disposal of the appeal, whichever is earlier. The parties are directed not to take any adjournment of hearing of the appeal already fixed on 08.04.2025. 4 SA No.16/Viz/2025 Garimella Venkata Appala Sarma 5. In the result, stay application is allowed. Order pronounced in the Open Court on conclusion of hearing on 4th April, 2025. Sd/- Sd/- (BALAKRISHNAN S.) ACCOUNTANT MEMEBR (VIJAY PAL RAO) VICE PRESIDENT Hyderabad, Dated 4th April, 2025 L.Rama, SPS 5 SA No.16/Viz/2025 Garimella Venkata Appala Sarma Copy to: S.No Addresses 1 Shri Garimella Venkata Appala Sarma, Flat No.L-523, MK Gold Coast, Yendada, Visakhapatnam 2 The Income Tax Officer, Ward (International Transaction), Visakhapatnam 3 The Pr.CIT, Visakhapatnam 4 The DR, ITAT Visakhapatnam Benches 5 Guard File "