SWARNALATHA POLICE,HYDERABAD V. INCOME TAX OFFICER, WARD-4(3), HYDERABAD

ITA 4/HYD/2025

AI Insights

The case revolves around an appeal by Swarnalatha Police against the order of the Commissioner of Income Tax (Appeals), Mumbai, which upheld the addition of Rs.12,91,000 as unexplained money under section 69A of the Income Tax Act, 1961. The addition was initially made by the Assessing Officer following the assessee's cash deposits during the demonetization period. The assessee argued that these deposits were from legitimate sources, including agricultural income, tuition fees, and gifts from her brother. The Tribunal, after reviewing the evidence, including the assessee's income tax returns and a confirmation email from her brother, concluded that the assessee had sufficiently explained the source of the deposits and allowed the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46442 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SM-B
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHUTOSH PRADHAN
• Assessee Lawyers: SASHANK DUNDU
• Keywords: Set aside; Gift
• Section: 144; 69A

Judgement Text

"आयकर अपीलीय अधिकरण, हैदराबाद पीठ में IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “B”, HYDERABAD BEFORE SHRI K.NARASIMHA CHARYT, JUDICIAL MEMBER & SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.अपी.सं / ITA No.4/Hyd/2025 (निर्धारण वर्ा / Assessment Year: 2017-18) Swarnalatha Police Hyderabad [PAN : ALNPP2141H] Vs. Income Tax Officer Ward-4(3) Hyderabad अपीलधर्थी / Appellant प्रत्‍ यर्थी / Respondent निर्धाररती‍द्वधरध/Assessee by: Shri Sashank Dundu, AR रधजस्‍ व‍द्वधरध/Revenue by: Shri Ashutosh Pradhan, DR सुिवधई‍की‍तधरीख/Date of hearing: 20/02/2025 घोर्णध की‍तधरीख/Pronouncement on: 12/03/2025 आदेश / ORDER PER K. NARASIMHA CHARY, J.M: Aggrieved by the order dated 23/7/2024 passed by the learned Commissioner of Income Tax (Appeals) (“learned CIT(A)”), Mumbai in the case of Swarnalatha Police (“the assessee”), assessee preferred this appeal. 2. Brief facts of the case are that the assessment in the case of the assessee was completed and assessment order under section 144 of the Income Tax Act, 1961 (in short “the Act”) dated 29/11/2019 was passed, by making an addition of cash deposits of Rs.12,91,000/- made during demonetization period, as unexplained money under section 69A of the 2 Act, against which, assessee preferred an appeal before the learned CIT(A). Learned CIT(A) confirmed the addition made by the learned Assessing Officer by holding that the assessee has not satisfactorily explained the nature and source of cash deposits. 3. Aggrieved by the order of the learned CIT(A), assessee preferred an appeal before the Tribunal and at the outset, learned AR contended that the assessee earns annual income of around Rs.2 lakhs from the agricultural land owned by her to the extent of Rs.11.19 acres and also derives income from house property. Assessee also conducts tuition classes for young students and earns tuition fee. Assessee’s brother is a doctor by profession, resident of California and whenever he visits India, he invariably stays with the assessee and at the end of the trip leaves unspent Indian currency with the assessee as a token of love and affection. Assessee offered her income to tax every year and filed her returns of income regularly. Since the assessee’s husband takes care of the family needs there was hardly any expenditure incurred by the assessee out of the income earned by her. During demonetization period she had to deposit the cash available with her in specified bank notes in her bank account. 4. Learned AR further contended that the learned CIT(A) erred in upholding the addition made by the learned AO without appreciating the fact that the assessee has valid sources for the cash deposits made during the demonetization period and also ignored the fact that the assessee declared agricultural income in the returns of income filed in the previous years. He further contended that even the assessee’s brother was not cross examined by the learned CIT(A) or remanded the matter to the learned Assessing Officer for examination of her brother to verify the correctness of the claim. He, therefore, prayed to set aside the order passed by the learned CIT(A) and delete the addition made by the learned AO. 5. Per contra, the learned DR relied on the orders of the authorities below and submitted that in spite of granting ample opportunities the 3 assessee failed to furnish any material to substantiate her grounds pertaining to the cash deposits made in her bank account. He, therefore, pleaded to uphold the order of the Ld.CIT(A) and dismiss the appeal filed by the assessee. 6. We have heard the rival submissions and perused the material on record in light of various evidences filed by the assessee. It is undisputed fact that the assessee made cash deposits of Rs.12,91,000/- during the demonetization period. We have also gone through the income tax returns filed by the assessee and find that the assessee had declared agricultural income as well as the earnings from her tuition fee in the previous years in the returns of income filed. The assessee had also proved the onus of proof of gift amount received from her brother by way of confirmation email from him and discharged her liability of ownership of the cash deposited with credible evidences. Hence, addition made by the learned AO and sustained by the learned CIT(A) under section 69A of the Act cannot be upheld. We are, therefore, inclined to set aside the order of the learned CIT(A) and direct the learned Assessing Officer to delete the addition made. Accordingly, the appeal filed by the assessee is allowed. 7. In the result, appeal filed by the assessee is allowed. Order pronounced in the open court on this the 12th March, 2025. Sd/- Sd/- (MADHUSUDAN SAWDIA) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 12/03/2025 L.Rama, SPS 4 Copy forwarded to: 1. Smt.Swarnalatha Police, 2-1-632, Block No.22, Flat No.4, Vignan- puri Colony, Vidyanagar, Hyderabad 2. The Income Tax Officer, Ward-4(3), Hyderabad 3. The Pr.CIT, Hyderabad 4. The DR, ITAT, Hyderabad 5. GUARD File TRUE COPY ASSISTANT REGISTRAR ITAT, HYDERABAD "