SURYANARAYANA GANDLA,ANANTAPUR V. ACIT., CIRCLE - 1, ANANTAPUR.

SA 21/HYD/2025

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The case involves a stay application by Suryanarayana Gandla against the collection of an outstanding tax demand for the assessment year 2017-2018. The demand arose from additions made by the Assessing Officer regarding cash deposits and payments exceeding prescribed limits under the Income Tax Act, 1961. The Tribunal considered the merits of the case, the evidence provided by the assessee, and the partial payment already made towards the tax demand. The Tribunal's decision to grant a stay was based on the prima facie case presented and the balance of convenience favoring the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708658 (ITAT-HYDERABAD)
• Appeal Type: Stay Application
• Pronouncement Date: 18-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHIN KUMAR
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Business income; Application of stay

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “B” BENCH: HYDERABAD BEFORE SHRI MANJUNATHA G, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER Stay Application No.21/Hyd./2025 Arising out of ITA.No.1122/Hyd./2025 - Assessment Year 2017-2018 Suryanarayana Gandla, ANANTAPUR – 515 001. Andhra Pradesh. PAN ABIPG4005A vs. The ACIT, Circle-1, ANANTAPUR. (Applicant) (Respondent) For Assessee : CA K A Sai Prasad For Revenue : Dr. Sachin Kumar, Sr. AR Date of Hearing : 18.07.2025 Date of Pronouncement : 18.07.2025 ORDER PER MANJUNATHA G. : By this stay application SA.No.21/Hyd./2025 the assessee seeks for stay of collection of outstanding demand for the assessment year 2017-2018. 2. CA, KA Sai Prasad, Learned Counsel for the Assessee referring to the reasons for stay of demand submitted that, the Assessing Officer made additions towards cash deposit of Rs.96,26,300/-, [comprising of 2 S.A.No.21/Hyd./2025 Rs.42,47,000/- in SBNs and Rs.53,79,300/- in other denominations] which were business receipts and duly recorded in the books of accounts as realization from sundry creditors. Although, the assessee has explained with relevant books of accounts and other evidences, the Assessing Officer made additions. Similarly, the Assessing Officer made addition of Rs.3,35,000/- u/sec.40A(3) of the Income Tax Act, 1961 [in short “the Act”] to the payment made to Shri G. Kristappa which was necessitated by business exigency and squarely falls within the exceptions under Rule 6DD of I.T. Rules, 1962. The Assessing Officer without appreciating the relevant facts, has simply made addition. The learned CIT(A) ignoring the explanation of assessee, has sustained the addition made by the Assessing Officer. Therefore, he submitted that, there is a prima facie case on merits. Further, Learned Counsel for the Assessee referring to the total tax demand of Rs.1,00,30,396/- submitted that, the appellant has already paid Rs.21,42,680/- after the assessment, which is more than 20% required to be paid by the assessee as per the law. 3 S.A.No.21/Hyd./2025 Since the assessee has made-out a prima facie case on merits and the balance of convenience is in favour of the assessee, the balance outstanding demand may be stayed for a period of six months or till the disposal of the appeal filed by the assessee, whichever is earlier. 3. Dr. Sachin Kumar, learned Sr. AR for the Revenue, on the other hand submitted that, the assessee may be directed to pay further amount towards outstanding demand. 4. We have heard both the parties, perused the stay petition filed by the assessee and documents placed on record. We have considered the relevant reasons given by the assessee for stay of outstanding demand of Rs.1,00,30,396/-. We find that, the Assessing Officer has made addition towards cash deposit of Rs.96,26,300/- u/sec.68 of the Income Tax Act, 1961 and also made addition of Rs.3,35,000/- u/sec.40A(3) of the Act. It was the argument of the Counsel for the Assessee that, cash deposited into bank account is, out of business receipts and the source has been recorded in the books of accounts out 4 S.A.No.21/Hyd./2025 of realization from debtors. The assessee further made-out a case that, payment made in cash in-excess of prescribed limit as per sec.40A(3) of the Act is covered under rule 6DD of IT Rules, 1962. Therefore, in our considered view, there is a prima facie case on merit in favour of the assessee. Further, the assessee has also paid Rs.21,42,680/- which is more than 20% of minimum payment required to be made in terms of sec.254(2A) of the Act. Therefore, considering the facts of the case and also payment made by the assessee towards the disputed demand, in our considered view, it is a fit case for grant of stay of balance outstanding demand. Thus, we grant stay of outstanding demand for a period of three months or till the disposal of the appeal of the assessee whichever is earlier. The Registry is already listed the appeal for hearing on 04.09.2025 and the same is come- up for hearing on the same date, for which, no separate notice will be issued to both the parties. 5. In the result, stay application of the assessee is disposed of in terms of our observations hereinabove. 5 S.A.No.21/Hyd./2025 Order pronounced in the open Court on 18.07.2025 at the time of conclusion of hearing of the stay application. Sd/- Sd/- [RAVISH SOOD] [MANJUNATHA G] JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated 18th July, 2025 VBP Copy to 1. Suryanarayana Gandla, ANANTAPUR – 515 001. Andhra Pradesh. C/o. Katrapati & Associates, 1-1- 298/2/B/3, Sowbhagya Avenue Apts. 1st Floor, Ashok Nagar, Street No.1, Hyderabad. Telangana. 2. The ACIT, Circle-1, 3rd Road, New Town, ANANTAPUR. 3. The Pr. CIT, Kurnool. 4. The DR ITAT “A” Bench, Hyderabad. 5. Guard File. //By Order// //True Copy// "