PAVANI PARAMESHWARA RAO,DELHI V. ACIT CIRCLE-63(1), DELHI

ITA 1824/DEL/2025

AI Insights

The case involves an appeal by Mr. Pavani Parameswawra Rao against the order of the National Faceless Appeal Centre (CIT(A)/NFAC), which arose from an assessment order passed by the ACIT Circle-63(1), Delhi. The assessment for the year 2017-18 included additions for unexplained cash deposits during the demonetization period and disallowed deductions for donations under Section 80G. The Tribunal found that the cash deposits were from professional receipts already accounted for and taxed, thus not unexplained. Regarding the donations, the Tribunal noted that they were made to eligible entities and through prescribed modes, thus the deductions should be allowed.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 774538 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2017-2018
• Appeal Filed On: 25-03-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay; Unexplained cash credit
• Section: 144; 80G

Judgement Text

"1 ITA No. 1824/Del/2025 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”: NEW DELHI BEFORE Ms. MADHUMITA ROY, JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 1824/DEL/2025 Assessment Year: 2017-18 Mr. Pavani Parameswawra Rao (P.P. Rao), 82, Lawyers Chamber, Supreme Court, New Delhi-110001. PAN: AACPR 8466 P Vs ACIT, Circle-63(1), Delhi. APPELLANT RESPONDENT Assessee represented by Ms. Pankhuri Srivastava, Adv.; Shri Alekshendra Sharma Adv. Department represented by Shri Manish Gupta, Sr. DR Date of hearing 11.08.2025 Date of pronouncement 09.09.2025 O R D E R PER Ms. MADHUMITA ROY, JM: The instant appeal filed by the assessee is directed against the order dated 06.12.2024 passed by the National Faceless Appeal Centre (hereinafter referred to as ‘CIT(A)/NFAC’), arising out of the assessment order passed by the ACIT Circle -63(1), Delhi dated 26.12.2019 under Section 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for Assessment Year 2017-18. 2 The appeal is time barred by 34 days. An application dated 25.03.2025 requesting condonation of delay supported with affidavit of legal representative, Printed from counselvise.com 2 ITA No. 1824/Del/2025 placed on record has been perused and even learned DR has not seriously disputed the delay aspect, thus delay of 34 days in filing the instant appeal is condoned. 3 Brief facts, leading to the case are that the assessee has filed the return of income for the Assessment Year 2017-18 on 23.03.2018, declaring an income of Rs. 13,61,52,450/-. The learned Assessing Officer in order of assessment dated 26.12.2019 has made two additions into return of income, first being sum of Rs. 46,02,500/- representing cash deposit into bank account during demonetization period, held as unexplained to protect the interest of revenue and the same is added as unexplained cash credit u/s 69A of the Act . Further deductions amounting to Rs. 40,40,000/- restricted to allowable deduction of Rs. 26,55,000/- under Chapter VI-A has also been denied and added back to the returned income of the assessee. In appeal raised before Ld. CIT(A), assessee remains unsuccessful. 4 Thus the assessee filed an appeal against the order of First Appellate Authority before us, raising two issues (supra). We have heard both the parties and perused the material placed on record. 5 The case of the appellant in context of first issue i.e. cash deposit during demonetization period, is that the source of deposit is professional receipts received in cash, duly accounted for filing return of income. The appellant has total professional receipts of Rs. 11,21,98,545/- including cash receipts of Rs. 73,70,000/-, which has been accepted by learned Assessing Officer in order of Printed from counselvise.com 3 ITA No. 1824/Del/2025 assessment. Appellant has deposited cash in his ICICI Bank Account, Saving Bank Account No. 629701513028, during demonetization period which is duly recorded in cash book of appellant, being part of audited financial statement of the appellant. In view of these facts, addition made u/s 69A of the Act is itself invalid. Provisions of section 69A of the Act read as under: “Unexplained money, etc. 69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.” 5.1 From perusal of provisions of section 69A of the Act, it is evident that provisions of section 69A of the Act applies where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, Printed from counselvise.com 4 ITA No. 1824/Del/2025 satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year. Thus for applicability of provision of section 69A of the Act, first condition is that in the financial year immediately preceding the assessment year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income and only if this first condition fulfils then second condition i.e. and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, then only the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year. However as in the facts of the appellant cash deposit is duly recoded in audited books of appellant, thus the very first condition of levy of provisions of section 69A does not fulfil, therefore in our view addition made and sustained is not in accordance with provisions of section 69A of the Act. Even otherwise once source of cash deposit in professional receipts of the appellant, on which appellant has paid tax, addition made on depositing the said receipts into bank account of the appellant leads to double taxation which is otherwise not Printed from counselvise.com 5 ITA No. 1824/Del/2025 permissible and cannot be said as unexplained. Thus learned Assessing Officer is directed to delete the same and in result issue decided in favour of assessee. 6 The appellant has made donation of Rs. 40,40,000/- and has claimed eligible deduction of Rs. 26,55,000/- u/s 80G of the Act under Chapter VIA of the Act. During the year under consideration appellant has made donation to Gujrat Law University having PAN AAATC6633B and All India Heart Foundation Delhi having PAN AAATA0096Q and has in fact made donations in preceding assessment years also. In view of the fact that appellant has made eligible donations to eligible entities and through prescribed mode of payment, denial of deduction is invalid and therefore the AO is directed to allow the deductions claimed by appellant in result issue decided in favour of assessee. 7. Assessee’s appeal ITA No. 1824/Del/2025 is allowed. Order pronounced in open court on 09.09.2025. Sd/- Sd/- (NAVEEN CHANDRA) (MS. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 09.09.2025. *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "