MURALIDHAR KAMISETTY,HYDERABAD V. ITO., WARD-13(1), HYDERABAD

ITA 1031/HYD/2025

AI Insights

The case revolves around the appeal by Sri Muralidhar Kamisetty against the order of the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre, which sustained the addition of Rs.9,07,000 as unexplained money under section 69A of the Income Tax Act, 1961. The addition was initially made by the Assessing Officer following scrutiny of cash deposits amounting to Rs.11,57,000 made during the demonetization period. The assessee argued that these deposits were from cash withdrawals made over several years for medical expenses, a claim supported by bank statements showing withdrawals nearly double the deposits. The Tribunal, after considering the submissions and evidence, sided with the assessee, highlighting the lack of consideration of relevant facts by the lower authorities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775167 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 17-06-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURESH BABU KN
• Assessee Lawyers: T. CHAITANYA KUMAR
• Keywords: Set aside

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “SM-A” BENCH: HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA G, ACCOUNTANT MEMBER ITA.No.1031/Hyd./2025 Assessment Year 2017-2018 Sri Muralidhar Kamisetty, Hyderabad – 500 008. PAN ALMPK9342E Telangana. vs. The Income Tax Officer, Ward – 13 (1), Hyderabad. (Appellant) (Respondent) For Assessee : Sri T. Chaitanya Kumar, Advocate For Revenue : Sri Suresh Babu KN, Sr. AR Date of Hearing : 26.08.2025 Date of Pronouncement : 04.09.2025 ORDER PER MANJUNATHA G. : The above appeal has been filed by the assessee against the Order dated 13.06.2025 of the learned Commissioner of Income Tax-(Appeals)-National Faceless Appeal Centre [in short “NFAC”], Delhi, relating to the assessment year 2017-2018. 2. Brief facts of the case are that, the appellant is an individual and filed return of income for the assessment Printed from counselvise.com 2 ITA.No.1031/Hyd./2025 year 2017-2018 on 18.07.2017 admitting total income at Rs.5,84,430/-. Subsequently, the case was selected for scrutiny for verifying the cash deposits of Rs.11,57,000/- made during the demonetization period. After considering the submissions made by the assessee during the assessment proceedings, the assessment was completed u/sec.143(3) of the Income Tax Act, 1961 [in short “the Act”] vide order dated 20.12.2019 by allowing Rs.2,50,000/- as cash balance available with him, keeping in view that the assessee is a pensioner and he might have saved some money for medical and health purpose and adding the balance amount of Rs.9,07,000/- as unexplained money in accordance with the provisions of section 69A of the Income Tax Act, 1961. 3. Aggrieved by the assessment order, the assessee preferred learned CIT(A) and the learned CIT(A)-NFAC was dismissed the appeal filed by the assessee vide order dated 24.05.2023 in absence of any response from the assessee to the notices issued and served and sustained the addition made by the Assessing Officer amounting Rs.9,07,000/- on Printed from counselvise.com 3 ITA.No.1031/Hyd./2025 account of explained deposit u/sec.69A of the Income Tax Act, 1961. 4. Aggrieved by the order of the learned CIT(A), the assessee preferred appeal before Tribunal and the Tribunal after considering the submissions of the assessee, vide order dated 26.09.2023 in ITA.No.368/Hyd/2023 has set-aside the matter to the file of the Assessing Officer with a direction to pass fresh order after affording due opportunity of hearing subjected to payment of Rs.2,000/- in Prime Minister Relief Fund within one month or from the date of receipt of the appellate order. 5. During the course of assessment proceedings before the Assessing Officer, the assessee appeared before the Assessing Officer through his Authorised Representative and made submissions. However, the Assessing Officer passed assessment order as per the directions of the Tribunal dated 26.09.2023 and made addition of Rs.9,07,000/- u/sec.69 of the Income Tax Act, 1961 vide Printed from counselvise.com 4 ITA.No.1031/Hyd./2025 order dated 11.03.2025 passed u/sec.143(3) r.w.s.154 of the Income Tax Act, 1961. 6. Aggrieved by the assessment order, the assessee preferred appeal before the learned CIT(A). The learned CIT(A) issued notice u/sec.250 of the Income Tax Act, 1961 calling the assessee to furnish his submissions. In response, the assessee has filed his written submissions which has been reproduced by the learned CIT(A) in his order from pages 4 to 7 of his order. Before the learned CIT(A) it was the submission of the assessee that, he has periodically withdrawn cash from his bank accounts i.e., Andhra Bank, State Bank of India and Canara Bank right from assessment year 2008-2009 to 2016-2017 which is almost double the amount of cash deposited into bank account during the demonetization period. He, therefore, submitted that, the addition made by the Assessing Officer be deleted. The learned CIT(A) after considering the submissions of the assessee, sustained the addition of Rs.9,07,000/- made by the Assessing Officer. Printed from counselvise.com 5 ITA.No.1031/Hyd./2025 7. Aggrieved by the order of the learned CIT(A), the assessee is now, in appeal before the Tribunal. 8. Sri T. Chaitanya Kumar, Advocate-Learned Counsel for the Assessee referring to various bank accounts held in the name of the assessee submitted that, the assessee has periodically withdrawn cash from various bank accounts right from assessment year 2008-2009 to 2016- 2017 which is almost double the amount of cash deposited into bank account during the demonetization period. The assessee being a retired teacher, aged 80 years, has withdrawn his pension credit into bank account periodically and the same has been kept for his medical requirement. Since the announcement of demonetization, the cash available with the assessee has deposited into bank account. Although, these evidences filed before the Assessing Officer and the learned CIT(A), but, both the authorities failed to consider the relevant evidences and made the addition. Therefore, he submitted that, the addition made by the Assessing Officer should be deleted. Printed from counselvise.com 6 ITA.No.1031/Hyd./2025 9. Sri Suresh Babu KN, learned Sr. AR for the Revenue, on the other hand, supporting the order of the Assessing Officer and the learned CIT(A) submitted that, the arguments of the assessee goes against preponderance of human probability. The argument that, he has withdrawn cash right from assessment year 2008-2009 for medical emergencies and the same has been kept without spending for medical emergencies, is contrary to human probability. Therefore, the argument of the assessee cannot be accepted. Since, the assessee has failed to explain source for cash deposited during the demonetization period, the Assessing Officer has rightly made the addition and thus, the Order of the learned CIT(A) should be upheld. 10. We have heard both the parties, perused the material on record and the orders of the authorities below. There is no dispute with regard to the fact that, the appellant has made cash deposit of Rs.11,57,000/- into his bank account during the demonetization period held with Canara Bank, Andhra Bank and State Bank of Hyderabad. The assessee has explained the source for cash deposit out Printed from counselvise.com 7 ITA.No.1031/Hyd./2025 of cash withdrawals from very same bank account right from assessment year 2008-2009 and up-to financial year 2016-2017 which runs into Rs.22,84,460/-. The assessee further claimed that, he is aged about 80 years and living with his two children and both of them are employed. Further, house hold expenses related to his living is taken care by his two children and whatever cash withdrawn from the bank is out of his pension and interest income is only for medical requirements and after spending for medical requirement, he has cash balance of Rs.11,97,000/- and the same has been deposited into bank accounts after announcement of demonetization period. We find that, the assessee is a retired teacher having income from pension and interest. Further, the amount of pension income credited to his bank account has been periodically withdrawn by the appellant right from financial year 2008- 2009 to 2016-2017 which is evident from the financial statements and the total amount was Rs.22,84,460/-. Going by the arguments of the assessee that, he is living with his two children, who are taking care of his house hold Printed from counselvise.com 8 ITA.No.1031/Hyd./2025 expenses. In our considered view, the cash withdrawals from the bank account for last so many years cannot be fully spent for the purpose of medical expenses. Since there is a sufficient cash withdrawn from the bank account which is almost double the amount of cash deposited into bank account during the demonetization period, in our considered view, the explanation of assessee with regard to source for cash deposited into bank accounts requires to be accepted. The Assessing Officer and the learned CIT(A) without considering the relevant facts, has simply made the addition towards cash deposit u/sec.69A of the Income Tax Act, 1961. Thus, we set aside the order of the learned CIT(A) and direct the Assessing Officer to delete the addition made towards cash deposit of Rs.9,07,000/- u/sec.69A of the Income Tax Act, 1961. 11. In the result, appeal of the Assessee is allowed. Printed from counselvise.com 9 ITA.No.1031/Hyd./2025 Order pronounced in the open Court on 04.09.2025. Sd/- Sd/- [VIJAY PAL RAO] [MANJUNATHA G] VICE PRESIDENT ACCOUNTANT MEMBER Hyderabad, Dated 04th September, 2025 VBP Copy to 1. Sri Muralidhar Kamisetty, E-Block, Flat No.101, Aditya Empress Towers, Shaikpetnala, Tolichowki, Golconda Post, Hyderabad – 500 008. Telangana. 2. The Income Tax Officer, Ward – 13(1), Aayakar Bhavan, Hyderabad. 3. The Pr. CIT, Hyderabad. 4. The DR ITAT “SM-A” Bench, Hyderabad. 5. Guard File. //By Order// //True Copy// Printed from counselvise.com "