NANJUNDAREDDY GOPALA REDDY,BENGALURU V. INCOME-TAX OFFICER, WARD-3(3) (4), BENGALURU

ITA 2192/BANG/2024

AI Insights

The case involves Nanjudareddy Gopala Reddy, who appealed against the order of the National Faceless Appeal Centre (NFAC) which upheld the AO's addition of INR 2,22,48,000 as unexplained cash credit under section 68 of the Income Tax Act, 1961 for the assessment year 2014-15. The additions were primarily based on substantial cash deposits in the assessee's bank accounts. The Tribunal examined the explanations provided by the assessee regarding the source of these deposits, which included advances from a property sale and personal savings. The Tribunal found some of the explanations credible, particularly regarding the deposits in Andhra Bank, but not for others, leading to a partial allowance of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474094 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASSESSEE IT WAS ONLY A SUM OF RS. .; ASSESSEES OWN; NANDINI DAS
• Assessee Lawyers: INDER PAUL BANSAL
• Keywords: Set aside; Unexplained cash credit; Cost of acquisition; Source of fund
• Section: 68; 13

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No. 2192/Bang/2024 Assessment Years: 2014-15 Nanjudareddy Gopala Reddy, No.13, Serenity Layout, Kaikondanahalli, Sarjapur Road, Bengaluru – 560 035. PAN – AABTS 8147 B Vs. The Income Tax Officer, Ward – 3(3)(4),, Bengaluru. . APPELLANT RESPONDENT Assessee by : Shri Inder Paul Bansal, AR Revenue by : Ms. Nandini Das, CIT (DR) Date of hearing : 19.12.2025 Date of Pronouncement : .01.2025 O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: This appeal, filed by the assessee, is against the order passed by the NFAC, Delhi dated 29/03/2024 vide DIN No. ITBA/NFAC/ APL/M/250/2023-24/1063658262(1) for the assessment year 2014-15. 2. The assessee has raised the following grounds of appeal: “1. That under the facts and circumstances of the case, Ld. CIT(A) of NFAC {CIT(A)} has erred in law as much as in facts in upholding the addition of Rs. 2,22,48,000/- made by the AO being an amount of cash deposited in three bank accounts of the assessee as unexplained cash ITA No.2192/Bang/2024 Page 2 of 16 . credit u/s 68 of the Income Tax Act, 1961(\"the Act\") and while doing so CIT(A) has failed to appreciate: a) that the explanation given by the assessee for an amount of Rs. 1,50,00.000/- was received by the assessee as an amount of advance from Mr. Chandra Kaladhar Reddy on account of proposed sale of immovable property owned by the assessee as it was evident from the payment made out of the said amount of Rs. 1,0,00,000/- for purchase of two immovable properties for a total sum of Rs. 1,62,43,992/- for which the payment was made immediately from the same bank account and share of Mr. Chandra Kaladhar Reddy was a sum of Rs. 1,21.33,185/- and for assessee it was only a sum of Rs. 41.10,807/- and assessee's own investment in purchase was a sum of Rs. 28.66,815/-. The explanation furnished by the assessee is supported by documentary evidence and is plausible, therefore, has been wrongly rejected by the AO and CIT(A) just for making and upholding the addition. b) Ld. CIT(A) has failed to appreciate that the other amount of Rs. 72,48,000/- (amount of cash deposits being Rs. 2,22,48,000/- (-) Rs. 1,50,00,000/- being received from Mr. Chandra Kaladhar Reddy) was nothing but was either from cash withdrawals from the bank accounts or own savings of the assessee for which also the proper explanation was furnished and the same has been wrongly rejected by the AO and CIT(A). c) That Ld. CIT(A) has failed to appreciate that in view of strained relation Sh. Chandra Kaladhar Reddy had become hostile to the assessee however. AO was not constrained to make enquiries from Mr. Chandra Kaladhar Reddy as there was strong evidence in favor of the fact that out of Rs. 1,50.00.000/-deposited in cash, Mr. Chandra Kaladhar Reddy was immediate beneficiary of an amount of Rs. 1,21,33,185/- which suggest that the cash deposit was received from him only by the assessee. d) In the facts and circumstances and in the light of explanation furnished by the assessee with documentary evidence the entire addition of Rs. 2,22,48,000/-was liable to be deleted and Ld. CIT(A) has failed to delete the same without any application of mind and without reasons. The addition of Rs. 2,22,48,0001- is prayed to be deleted. 2. That under the facts and circumstances of the case, Ld. CIT(A) has erred in law as much as in fact in holding that the assessee has not explained the source of cash in the hands of Mr. Chandra Kaladhar Reddy as according to law what was required to be furnished by the assessee was an explanation regarding nature and source of the credit in the hands of the assessee and the explanation offered by the assessee should be satisfactory. The assessee was not liable for submitting the explanation with regard to source of cash in the hands of M.r Chandra Kaladhar Reddy which tantamount to explaining source of source, which is not intendment of the statutory provisions applicable for the year under consideration. 3. That under the facts and circumstances of the case, Ld. CIT(A) has erred in law as much as in fact in holding that assessee has not been able ITA No.2192/Bang/2024 Page 3 of 16 . to submit explanation regarding other deposits of Rs. 7,00,000/- in Andhra Bank Account. 4. That under the facts and circumstances of the case, Ld. CIT(A) has erred in law as much as in fact in in treating the sum of Rs. 52,48,000/- cash deposited in Karnataka State Apex Co-operative Bank and Rs. 13,00.000/- in Chartered Sehkari Co-operative Bank being cash out of earlier cash withdrawals from these banks aggregating to Rs. 41.27,000/- and upholding the addition. The fact regarding cash withdrawals having been made prior to cash deposits has not bee denied or controverted and nothing has been brought on record to show that the cash withdrawals were utilized somewhere else, therefore, addition has wrongly been upheld in this regard. 5. That under the facts and circumstances of the case. Ld. CIT(A) has erred in law as much as in fact in upholding the addition of Rs. 12,45,000/- comprising of Rs.10,00.000/- being on account of alleged unaccounted commission received from KR Shelters Pvt. Ltd. and also a sum of Rs. 2,4.000/-. The addition is prayed to be deleted. 6. That under the facts and circumstances of the case. Ld. AO has erred in law as much as in fact in levying interest under section 234A. 2343. and 234C of the Act. 7. That appellant craves to leave, alter, amend or modify the grounds of appeal before or during the hearing of the appeal. 8. That each ground is independent and without preju dice to ether.” 3. The interconnected issue raised by the assessee vide ground Nos. 1 to 4 is that the learned CIT(A), erred in confirming the addition of cash deposit in the banks aggregating to Rs. 2,22,48,000/- as unexplained under section 68 of the Act. 4. The facts, in brief, are that the assessee is an individual earning income under the heads of salary, house property, business, and other sources. The case of assessee was selected for scrutiny under CASS due to cash deposits in a bank. 5. During the assessment proceedings, the AO observed that the assessee had deposited cash in three different bank accounts during the ITA No.2192/Bang/2024 Page 4 of 16 . year, totaling to ₹2,22,48,000/- only. The details of these cash deposits across different bank accounts are as follows: 1. Andhara Bank ₹ 1,57,00,000/- 2. Chartered Sahakari Co.Op Bank ₹ 13,00,000/- 3. Karnataka State Apex Co.Op Bank ₹ 52,48,000/- 6. The assessee was asked to explain the sources of these cash deposits but failed to provide a response. Consequently, in the absence of any explanation, the AO treated the cash deposits of ₹2,22,48,000/- as unexplained credit under section 68 of the Act. 7. Aggrieved by this decision, the assessee filed an appeal before the learned CIT(A). 8. Before the learned CIT(A), the assessee submitted that out of the total cash deposits in Andhra Bank, an amount of ₹1.5 crore was deposited on 06-06-2013, representing an advance received from Shri Chandra Kaladhara Reddy against the agreement to sale of a property. The assessee claimed ownership of an immovable property located at site No. 460 in HSR Layout, Sector-1, Bangalore, measuring 111.41 square meters, for which he had entered into an oral agreement to sell to Shri Chandra Kaladhara Reddy for a total consideration of ₹2,50,00,000/- only and paid the amount of Rs. 2,00,00,000.00 in cash. 9. As part of this oral agreement, Shri Chandra Kaladhara Reddy made an initial advance cash payment of ₹2,00,00,000/-, major part of which was deposited into the assessee’s bank account. However, on the same day, Shri Chandra Kaladhara Reddy decided not to proceed with ITA No.2192/Bang/2024 Page 5 of 16 . the purchase, as he became interested in acquiring another property instead. Consequently, he requested a refund of the advance payment. Alternatively, he offered the assessee an opportunity to become a co- purchaser in the new property in which he was interested. He also agreed to purchase the assessee’s property at a future date and requested that ₹37 lakh can be retained as an advance for the future transaction. 10. The total cost of the new property, including purchase consideration, stamp duty, and other registration expenses, was ₹1,62,43,992/- only. Accordingly, on the same day (06-06-2013), the assessee issued a pay order for ₹1,62,43,992/- from his bank, funded by the cash deposit of ₹1.5 crore. In this transaction, the assessee's share of the property cost amounted to ₹41,10,807/-, while Shri Chandra Kaladhara Reddy’s share stood at ₹1,21,33,185/-. Therefore, out of the ₹1.5 crore received from Shri Chandra Kaladhara Reddy, ₹1,21,33,185/- was refunded through payment towards the purchase cost of the new property, leaving a balance of ₹28,66,815/-. 11. As Shri Chandra Kaladhara Reddy had agreed to retain ₹37 lakh as an advance for the future purchase of the assessee’s property, but only ₹28,66,815/- remained from the original advance, Shri Chandra Kaladhara Reddy made an additional cash payment of ₹8,33,185/- to fulfill the agreed advance amount. This additional cash payment was subsequently utilized for making cash deposits in Andhra Bank amounting to ₹7 lakhs over time. ITA No.2192/Bang/2024 Page 6 of 16 . 12. Based on the above explanation, the assessee contended that the cash deposit of ₹1.57 crore in Andhra Bank during the year was duly explained. 13. Regarding the cash deposits of ₹13 lakh in Chartered Sahakari Bank and ₹52.48 lakh in Karnataka Apex Cooperative Bank, the assessee argued that these deposits were made from withdrawals from different bank accounts held by him as well as personal savings besides the cash received against the agreement to sale of the property. 14. The learned CIT(A) forwarded the assessee’s submission to the AO for a remand report. In the remand report, the AO stated that the assessee had not provided any documentary evidence to substantiate the source of the cash deposits in Chartered Sahakari Bank and Karnataka Apex Cooperative Bank, amounting to ₹13 lakh and ₹52.48 lakh, respectively. Therefore, the AO recommended that the assessee’s claim should not be accepted. 15. Regarding the cash deposit of ₹1.57 crore in Andhra Bank, the AO in the remand report noted that the assessee failed to explain why the entire advance amount was not refunded when the original deal did not materialize. Additionally, the assessee did not provide a satisfactory explanation for participating as a co-purchaser with Shri Chandra Kaladhara Reddy. The AO further observed that the nature of the explanation provided was uncommon and lacked credibility. ITA No.2192/Bang/2024 Page 7 of 16 . 16. In response, the assessee reiterated his earlier explanation and maintained that the cash deposits in all three bank accounts were duly explained. 17. After considering the facts in totality, the learned CIT(A) rejected the assessee’s claim and upheld the addition made by the AO. The relevant observations of the learned CIT(A) are as follows: 12.3 I have considered the submission and rejoinder together with Remand Report carefully. It is claimed that the appellant received cash deposit of Rs. 1,50,000/- on the basis of oral sale agreement. However, the buyer on the same day rescinded the oral agreement and wanted the cash back. The appellant has not explained as to why the cash was not given back and why there was a need to go ahead with the purchase of property with Mr. Chandra Kaladhara Reddy. Thus, the amount deposited in cash in the account of appellant has been used for purchase of property worth Rs. 1,21,06,337/- in the name of Mr. Chandra Kaladhara Reddy with appellant’s share Rs. 41,10,807/-. In the whole process, the appellant has not explained the source of cash in the hands of Mr. Chandra Kaladhara Reddy. No attempt has been made in the submission to explain the source of such huge amount received from him. Under the circumstances, the AO has correctly treated the amount of Rs. 1,50,000/- as unexplained. 12.4 Other deposit of Rs. 7,00,000/- in Andhra Bank: These deposits were made on 17.09.2013, 2.11.2013 and 05.03.2014 in amounts of Rs. 1,00,000/-, Rs. 1,00,000/- and Rs. 5,00,000/- respectively. As per the AO’s Remand Report, the appellant has not given any details in the submission. However, the appellant has stated that explanation is already provided in para 11 of the written submission. On perusal of the said submission, it is seen that the source of the same is cash of Rs. 8,33,185/- received from same Mr. Chandra Kaladhara Reddy. No explanation regarding the source of Mr. Chandra Kaladhara Reddy has been given by the appellant. Therefore, the explanation is not acceptable and the addition made by the AO is sustained. 12.5 The appellant has explained that there is a mistake in AO’s order regarding the amount of cash deposit in Chartered Sahakari Co-op. Bank. The cash deposit is mentioned as Rs. 52,48,000/- which is actually Rs. 13,00,000/- whereas the cash deposit of Rs. 52,48,000/- pertains to account in Karnataka State Apex Co-op. Bank. The AO has agreed with this in the Remand Report. 12.6 Deposit of Rs. 52,48,000/- in Karnataka State Apex Co-op. Bank and Rs. 13,00,000/- in Chartered Sahakari Co-op. Bank: It is submitted that deposits are made out of earlier cash withdrawals from Andhra Bank account and from Chartered Sahakari Co-op. Bank Ltd included deposit of Rs. 6,00,000/- on 27.08.2013 and Rs. 5,00,000/- on 04.09.2013. The appellant has given a chart showing cash withdrawals from Andhra Bank totaling Rs. 37,77,000/- and Rs. 3,50,000/- from Chartered Sahakari Co-op. Bank. ITA No.2192/Bang/2024 Page 8 of 16 . 12.6.1 The appellant has sought to explain the cash deposits through such cash withdrawals. The AO has stated that no documentary evidence has been furnished and genuineness of appellant’s claim cannot be verified. 12.6.2 I have considered the matter carefully. The appellant has sought to explain the cash deposit of Rs. 52,48,000/- in Karnataka State Apex Co-op. Bank and Rs. 13,00,000/- in Chartered Sahakari Co-op. Bank by way of earlier cash withdrawals from Andhra Bank account and Chartered Sahakari Co-op. Bank totaling Rs. 41,27,000/-. The total cash deposit is Rs. 65,48,000/- whereas the cash withdrawals are only Rs. 41,27,000/-. Moreover, no evidence has been furnished to link between the cash withdrawals with cash deposits. Some cash withdrawals were made after last cash deposit. As such, it is clear that the explanation given by the appellant is not sustainable and is therefore rejected. Both the cash deposits are held to be unexplained once and the addition made by the AO is upheld. Accordingly, the entire addition of Rs. 2,22,48,000/- made by the AO is hereby confirmed. 17.1 Being aggrieved by the order of the learned CIT(A), the assessee has filed the present appeal before us. 17.2 The learned AR before us filed paper book running from 1 to 126 pages and contended that the amount of ₹1,50,00,000/- was received as an advance from Shri Chandra Kaladhara Reddy towards the proposed sale of an immovable property. However, this amount was subsequently utilized for the purchase of another property in a joint arrangement with Shri Reddy. The explanation was duly supported by documentary evidence, yet the authorities erroneously rejected the assessee’s claim. 17.3 The learned AR further contended that due to strained relations with Shri Chandra Kaladhara Reddy, it was impractical to obtain a confirmation from him regarding the source of the funds. However, the authorities failed to conduct any independent inquiries with Shri Reddy and instead summarily rejected the explanation provided by the assessee. ITA No.2192/Bang/2024 Page 9 of 16 . 17.4 The learned AR also emphasized that a significant portion of the cash deposits was immediately utilized for the purchase of property, which substantiated the genuineness of the source of funds. 17.5 Additionally, the assessee challenged the addition of ₹7,00,000/- in Andhra Bank, arguing that a proper explanation had been provided but was disregarded by the authorities. Similarly, with respect to the deposits of ₹52,48,000/- in Karnataka State Apex Co-operative Bank and ₹13,00,000/- in Chartered Sahakari Co-operative Bank, the assessee asserted that these amounts originated from prior withdrawals, a claim that had not been disproved by the revenue authorities. Therefore, the assessee argued that treating these deposits as unexplained was unjustified. 17.6 On the contrary, the learned DR before us submitted that it is the onus upon the assessee to justify the source of cash deposit in the bank based on the documentary evidence. There is no document furnished by the assessee that the cash of Rs. 1,57,00,000.00 was received from Shri Chandra Kaladhara Reddy. Likewise, there is no detail furnished by the assessee that the cash withdrawal on the earlier occasion was utilized for the purpose of re-deposit on subsequent date. As per the learned DR, no prudent person withdraws the money from the bank in cash and deposits the same on a later date. The learned DR vehemently supported the finding of the authorities below. 18. We have carefully considered the submissions of both parties, examined the records, and reviewed the supporting documents. The primary issue under consideration is whether the cash deposits totaling ITA No.2192/Bang/2024 Page 10 of 16 . ₹2,22,48,000/- made by the assessee in various bank accounts during the relevant financial year have been satisfactorily explained. 1. Cash Deposit of ₹1,57,00,000/- in Andhra Bank: 18.1 The assessee has maintained that an amount of ₹1.50 crore was received in cash from Mr. Chandra Kaladhara Reddy as an advance for the sale of immovable property through an oral agreement. Subsequently, Mr. Chandra Kaladhara Reddy rescinded the deal on the same day and instead proposed that the assessee should become a co- purchaser in another property. Mr. Chandra Kaladhara Reddy further suggested for adjusting the advance towards the cost of new property to be purchased. The assessee has substantiated this transaction by producing the sale-purchase deed, which clearly reflects that Mr. Reddy was a direct beneficiary of an amount to the extent of ₹ 1,21,33,185/-, as it was utilized for the acquisition of the said property. 18.2 It is a well-recognized fact that real estate transactions in India often take place based on oral agreements, particularly in cases where mutual trust exists between parties. The sale-purchase deed furnished by the assessee before the ld. CIT(A) and in remand proceedings before the AO clearly establishes the flow of funds. This documentary evidence directly supports the assessee’s explanation that the cash received was used towards the cost of acquiring the property for Mr. Chandra Kaladhara Reddy. Despite this crucial fact being on record, both the CIT(A) and the AO have failed to consider it, which constitutes a significant lapse in the assessment proceedings. ITA No.2192/Bang/2024 Page 11 of 16 . 18.3 The revenue's objection that the assessee failed to return the entire advance to Shri Chandra Kaladhara Reddy is misplaced. Consequently, treating the entire cash deposit as unexplained cash credit is grossly unjustified given the facts and circumstances of the case. The funds were not retained by the assessee for personal use but were instead utilized for a property transaction in which Shri Chandra Kaladhara Reddy was the primary beneficiary. 18.4 The fact that the money was used for the stated purpose, as corroborated by official sale-purchase documents, validates the genuineness of the assessee’s explanation. Therefore, in our considered opinion, no addition to the extent of ₹1,21,33,185/- should be made in the hands of the assessee concerning the cash deposit of ₹1.5 crore for the reasons stated above. 18.5 With regard to the question raised by the AO and the learned CIT(A) regarding why the entire amount was not returned, it is noted that the assessee explained that, as per the new proposal, Shri Chandra Kaladhara Reddy agreed to purchase the assessee’s property in the future and that an advance of ₹37 lakh was agreed upon. After adjusting ₹1,21,33,185/- from the initial advance of ₹1.5 crore, only ₹28,66,815/- remained with the assessee. Since the agreed advance amount was ₹37 lakh, Shri Chandra Kaladhara Reddy subsequently made an additional cash payment of ₹8,33,185/-, which was later utilized for making a cash deposit of ₹7 lakh on subsequent occasions. 18.6 We note that while the assessee’s explanation is not entirely corroborated by documentary evidence, a substantial portion of it is ITA No.2192/Bang/2024 Page 12 of 16 . supported by facts and circumstances. Specifically, the deposit of ₹1.5 crore was utilized for the joint purchase of a property in the names of both the assessee and Shri Chandra Kaladhara Reddy. Furthermore, no contrary material has been brought on record by the Revenue to disprove the assessee’s explanation under the given facts and circumstances. 18.7 Additionally, the Revenue failed to conduct any independent inquiry with Shri Chandra Kaladhara Reddy, despite all relevant details being available on record. In view of the above, we hold that the assessee has duly discharged the primary onus under Section 68 of the Act concerning the cash deposit of ₹1.57 crore in Andhra Bank. Since the Revenue has not controverted this explanation through independent inquiry or contrary evidence, we hereby set aside the findings of the lower authorities and direct the AO to delete the addition of ₹1.57 crore. 2. Cash Deposits in Chartered Sahakari Co-operative Bank and Karnataka State Apex Co-operative Bank: 19. From the preceding discussion, we note that the assessee has claimed that the cash deposits of ₹13,00,000/- in Chartered Sahakari Co- operative Bank and ₹52,48,000/- in Karnataka Apex Co-operative Bank were sourced from cash withdrawals made on earlier occasions. 19.1 In this regard, we have examined the bank statements of the assessee maintained with various banks, including Andhra Bank, Chartered Sahakari Co-operative Bank, Karnataka Apex Co-operative Bank, Corporation Bank, and SBI, as available on pages 52 to 70 of the ITA No.2192/Bang/2024 Page 13 of 16 . paper book. Upon reviewing these statements, we observe that the assessee has made cash withdrawals from these banks throughout the year. The details of the same is available in paper book, particularly on page 5 of the paper book. Similarly, we also note that there was balance cash receipt of Rs. 50 lacs (200 lacs less 150 lacs) against the sale of the property discussed above. The aggerate of all these cash is sufficient to justify the deposit of cash discussed above. At the same time, the revenue has not brought anything on record suggesting that the amount of cash available in his hands discussed above has been utilised for any other purposes i.e. personal expenses or investments other than the deposit in the impugned bank accounts. Given these facts and circumstances, we are inclined to set aside order of the learned CIT-A with the direction to the AO to delete the addition made by him on account of cash deposits in the bank. Accordingly, the assessee’s grounds of appeal concerning the additions made on account of cash deposits in Chartered Sahakari Co-operative Bank and Karnataka Apex Co-operative Bank are hereby allowed. 20. The next issue raised by the assessee is that the learned CIT(A) erred in confirming the addition of Rs. 12.45 Lakh. 21. During the assessment proceedings, the AO observed that the assessee’s bank account with Andhra Bank was credited with ₹10 lakh from M/s KR Shelter on account of commission, which was not offered to tax. Similarly, the Andhra Bank account was credited with ₹2.45 lakh as interest income, which was also not disclosed for tax purposes. Consequently, the AO added ₹12.45 lakh to the total income of the assessee. ITA No.2192/Bang/2024 Page 14 of 16 . 22. On appeal, the learned CIT(A) upheld the addition made by the AO. 23. Aggrieved by the order of the learned CIT(A), the assessee has filed the present appeal before ITAT. 24. The learned AR before us submitted that the amount received from M/s KR Shelter has been duly disclosed in the books of accounts and offered to tax. Accordingly, the addition made by the authorities below is not sustainable. 24.1 The learned AR further submitted that the amount of Rs. 2.45 lakh was not representing the interest as alleged by the revenue. As such the impugned amount represents the encashment of the LIC which was duly disclosed in the books of accounts. 25. On the other hand, the learned DR before us vehemently supported the order of the authorities below. 27. We have heard the rival contentions of both parties and perused the materials available on record. From the preceding discussion, we note that the AO alleged a credit of ₹10 lakh in the assessee’s bank account from M/s KR Shelter and ₹2.45 lakh on account of interest, neither of which were offered to tax. 27.1 In this regard, we examined the assessee’s bank statement with Andhra Bank, placed on pages 52 to 57 of the paper book, and observed ITA No.2192/Bang/2024 Page 15 of 16 . that a total of ₹29 lakh was credited from M/s KR Shelter Pvt. Ltd. on three different dates, as detailed below: Date Amount Credited 09-04-2013 ₹10 Lakh 24-04-2013 ₹10 Lakh 27-05-2013 ₹9 Lakh 27.2 Furthermore, upon reviewing the assessee’s profit and loss account and balance sheet for the year under consideration, as well as the balance sheet for the immediately preceding year (placed on pages 21 to 24 of the paper book), we note that the assessee has reported commission income of ₹9 lakh from KR Shelter Pvt. Ltd. and has shown ₹10 lakh as an advance received from the said party. Therefore, out of the sum of ₹29 lakh credited from M/s KR Shelter Pvt. Ltd., only ₹19 lakh is accounted for in the books as commission income and advance. However, the accounting treatment for the remaining ₹10 lakh is not substantiated in the profit and loss account or balance sheet. Based on the facts emerging from the above discussion, we conclude that the assessee has failed to establish that the amount of ₹10 lakh credited to his bank account was duly accounted for and offered to tax. Accordingly, we confirm the same. 27.3 Similarly, we note that on 27-08-2013, the assessee’s Andhra Bank account was credited with ₹2.45 lakh, with the transaction description reading \"Inst03551 Clg Axis Bank Ltd,\" which was treated by the authorities below to be an interest credit. However, upon reviewing the same, we note that Inst03551 represents the “instrument” and not ITA No.2192/Bang/2024 Page 16 of 16 . the interest as alleged by the revenue. Accordingly, we are of the view that such amount of Rs. 2.45 lacs do not represent the undisclosed interest income of the assessee as alleged by the authorities below. Accordingly, we set aside the finding of the learned CIT-A and direct the AO to delete the addition made by him for Rs. 2.45 lakhs on account of interest income. Hence, the ground of appeal raised by the assessee is hereby partly allowed. 28. In the result, the appeal of the assessee is hereby partly allowed. Order pronounced in court on 20th day of February, 2025 Sd/- Sd/- (KESHAV DUBEY) (WASEEM AHMED) Judicial Member Accountant Member Bangalore Dated, 20th February, 2025 / vms / Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore "