SATYANAGA VEERA ANJANEYA BABU GUTTA,HYDERABAD V. ITO., WARD - 13(5), HYDERABAD.

ITA 442/HYD/2025

AI Insights

The case involves Shri Satyanaga Veera Anjaneya Babu Gutta, who appealed against the order of the Learned First Appellate Authority confirming the additions made by the Assessing Officer under Section 69A of the Income Tax Act, 1961, for the Assessment Year 2017-18. The additions were related to unexplained cash deposits and excess deposits not backed by sufficient cash on hand. The Tribunal found that the Assessing Officer had not adequately verified the claims or provided sufficient opportunity to the assessee to substantiate the transactions. Consequently, the Tribunal remanded the matter back to the Assessing Officer for a detailed examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 706794 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2017-2018
• Appeal Filed On: 12-03-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SAI PRASAD
• Keywords: Set aside; Opportunity of being heard; Corroborative evidences; Principle of natural justice
• Section: 143(3); 133(6)

Judgement Text

" आयकर अपीलीय अधिकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A’ Bench, Hyderabad श्री रविश सूद, न् याययक सदस् य एवं श्री मिुसूदन सावडिया, लेखा सदस् य क े समक्ष । BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.अपी.सं /ITA No.442/Hyd/2025 (निर्धारण वर्ा/Assessment Year:2017-18) Shri Satyanaga Veera Anjaneya Babu Gutta, Hyderabad. PAN: ACAPG3742M Vs. Income Tax Officer, Ward 13(5), Hyderabad. (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri K.A. Sai Prasad, C.A. रधजस् व द्वधरध/Revenue by:: Shri Abhinav Pitta, SR-DR सुिवधई की तधरीख/Date of hearing: 07/07/2025 घोर्णध की तधरीख/Pronouncement: 08/07/2025 आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M.: This appeal is filed by Shri Satyanaga Veera Anjaneya Babu Gutta (“the assessee”), feeling aggrieved by the order passed by the Learned Addl/JCIT(A)-2, Chennai (“Ld. First Appellate Authority”), dated 17.02.2025 for the A.Y. 2017-18. 2. The assessee has raised the following grounds of appeal : ITA No.664/Hyd/2025 2 3. The brief facts of the case are that the assessee is an individual who filed his return of income for A.Y. 2017–18 on 05.08.2017, declaring total income of Rs.6,01,540/-. The case of the assessee was selected for limited scrutiny under CASS to verify cash deposit during the year, cash withdrawals, and cash deposit during the demonetisation period. A notice under Section 143(2) of the Income ITA No.664/Hyd/2025 3 Tax Act, 1961 (“the Act”) was issued on 14.08.2018. After considering the submissions of the assessee, the Learned Assessing Officer (“Ld. AO”) passed the assessment order under Section 143(3) of the Act dated 03.12.2019, making an addition of Rs.7,89,202/- under Section 69A of the Act and assessed the total income at Rs.13,90,742/-. 4. Aggrieved with the order of Ld. AO, the assessee filed an appeal before the Ld. First Appellate Authority, who dismissed the same by confirming the addition. 5. Aggrieved with the order of Ld. First Appellate Authority, the assessee is now in appeal before the Tribunal. The Learned Authorised Representative (“Ld. AR”) submitted that, the total addition of Rs.7,89,202/- made by the Ld. AO comprises two parts: (a) Rs.6,00,000/- alleged as unexplained cash deposit, and (b) Rs.1,89,202/- being excess deposit not backed by sufficient cash on hand. 5.1 As regards the addition of Rs.6,00,000/- is concerned, the Ld. AR submitted that, the assessee had clearly explained that the amount ITA No.664/Hyd/2025 4 was drawn by way of bearer cheque in the name of his brother, Shri G. Ramesh Babu, and the cash was subsequently handed over to the assessee and deposited into his bank account. The Ld. AO, however, rejected the explanation without making any independent enquiry or calling for confirmation from the brother of the assessee. It was argued that no opportunity was given to the assessee to substantiate this transaction. 5.2 With respect to the balance addition of Rs.1,89,202/- is concerned, the Ld. AR submitted that the assessee had submitted working of cash availability before the Ld. AO showing cash deposits made prior to the demonetisation period amounting to Rs.24,93,202/-. However, due to a clerical oversight, two earlier deposits of Rs.1,00,000/- each made on 20.04.2016 and 25.04.2016 were inadvertently omitted from the reconciliation. The Ld. AR submitted that the assessee is in a position to file a corrected cash flow statement and supporting evidence, if one more opportunity is granted. Thus, the Ld. AR prayed that in the interest of justice and fair play, both additions may be restored to the file of the Ld. AO for proper verification and adjudication. ITA No.664/Hyd/2025 5 6. Per contra, the Learned Departmental Representative (“Ld. DR”) supported the order of the Ld. AO and the Ld. First Appellate Authority, contending that the assessee was given sufficient opportunity during the assessment as well as appellate proceedings to substantiate the source of the cash deposits. Hence, the Ld. DR objected to any further remand, arguing that the assessee had failed to discharge his onus during earlier opportunities provided by the revenue authorities. 7. We have considered the rival submissions of the Ld. AR and the Ld. DR, perused the assessment order, the appellate order of the Ld. First Appellate Authority, and the material placed on record. 7.1 On the addition of Rs.6,00,000/-, we find that the assessee had claimed the amount was received in cash from his brother, who had drawn the sum by cheque in his own name. However, the record does not show any confirmation or affidavit from the brother of the assessee, nor any effort by the Ld. AO to verify this claim through notice under Section 133(6) of the Act or any other mode of enquiry. The contention of the Ld. AR that the assessee was not granted ITA No.664/Hyd/2025 6 sufficient opportunity to substantiate this transaction appears justified in view of the lack of enquiry or adverse material. In these circumstances, in the interest of natural justice, we are inclined to restore this issue to the file of the Ld. AO for fresh examination after granting adequate opportunity to the assessee to furnish confirmation and other supporting evidence. 7.2 On the addition of Rs.1,89,202/-, the assessee submitted that due to an inadvertent error, two earlier deposits made in April 2016 were omitted from the cash flow statement. We have gone through the bank entries placed in the page no.6 of the paper book and find that the said deposits are reflected in the bank account. If the assessee is able to provide a revised cash availability statement duly backed by evidence, this issue also deserves re-examination. Thus, to verify the genuineness of the revised working, this issue is also remitted to the file of the Ld. AO for fresh adjudication. 7.3 In view of the above discussion, both the additions of Rs.6,00,000/- and Rs.1,89,202/- made under Section 69A of the Act are set aside, and the matter is restored to the file of the Ld. AO with a ITA No.664/Hyd/2025 7 direction to re-adjudicate the issues afresh, after affording a reasonable opportunity of being heard to the assessee and verifying all supporting documents. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 8th July, 2025. Sd/- Sd/- (RAVISH SOOD) (MADHUSUDAN SAWDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad. Dated: 08.07.2025. * Reddy gp Copy of the Order forwarded to : 1. Shri Satyanaga Veera Anjaneya Babu Gutta, C/o Katrapati & Associates, 1-1-298/2/B/3, Sowbhagya Avenue Apartments, 1st Floor, Ashok Nagar, Hyderabad-500 020 2. ITO, Ward 13(5), Hyderabad. 3. Pr.CIT, Hyderabad. 4. DR, ITAT, Hyderabad. 5. Guard file. BY ORDER, "