VENKAT REDDY BEERAGUDEM,HYDERABAD V. ITO., WARD-13(1), HYDERABAD

ITA 1276/HYD/2024

AI Insights

The case involves Mr. Venkat Reddy Beeragudem, the appellant, who contested an order from the CIT(A) regarding an addition of Rs. 50 lakhs as unexplained investment under section 69 of the Income Tax Act, 1961. The addition was initially made by the Assessing Officer, who scrutinized the appellant's income sources, particularly from a liquor business, and found discrepancies in the financial records concerning a time deposit with ICICI Bank. The appellant argued that the funds were a gift from his son residing in the USA, supported by a Gift Deed and bank statements. However, the CIT(A) dismissed the appeal for non-prosecution without considering these evidences. The Tribunal, after hearing both parties, decided to set aside the CIT(A)'s order and directed a re-examination of the facts by the Assessing Officer, particularly to verify the familial relationship and the legitimacy of the gift.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708344 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2020-2021
• Other Referred Cases: Collector, Land Acquisition vs. MST Katiji [1987] 167 ITR 471 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SACHIN KUMAR
• Assessee Lawyers: GBS MAITREYA
• Keywords: Condonation of delay; Unexplained investment; Gift

Judgement Text

" 1 ITA.No.1276/Hyd./2024 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “B” BENCH: HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA G, ACCOUNTANT MEMBER ITA.No.1276/Hyd./2024 Assessment Year 2020-2021 Mr. Venkat Reddy Beeragudem, Hyderabad. PIN – 500 028. PAN AGBPB6324M vs. The Income Tax Officer, Ward-13(1), Hyderabad. (Appellant) (Respondent) For Assessee : CA, GBS Maitreya For Revenue : Dr. Sachin Kumar, Sr. AR Date of Hearing : 11.07.2025 Date of Pronouncement : 16.07.2025 ORDER PER MANJUNATHA G. : This appeal has been filed by the Assessee against the Order dated 21.06.2024 of the learned CIT(A)- National Faceless Appeal Centre [in short the “NFAC”] Delhi, relating to the assessment year 2020-2021. 2. At the very outset, CA, GBS Maitreya, Learned Counsel for the Assessee submitted that, there is a delay of 101 days in filing the appeal before the Tribunal. The 2 ITA.No.1276/Hyd./2024 assessee has filed an affidavit explaining the reasons for the delay and pleaded for condonation of delay in filing the appeal before the Tribunal. The reasons explained by the assessee for not filing the appeal within the time before the Tribunal are that, the Accountant responsible for managing the tax matters has failed to monitor the Income Tax Portal and did not inform to the assessee about the order of the learned CIT(A). Further, the said Accountant had to leave unexpectedly for his native place due to a bereavement in his family, which has further resulted in a failure to communicate the notice of appeal to the assessee or to his tax consultant. Thus, there is a delay of 101 days in filing the instant appeal before the Tribuanl. The Learned Counsel for the Assessee, therefore, pleaded to condone the delay of 101 days in filing the appeal before the Tribunal in the interest of substantial justice. 3. Dr. Sachin Kumar, learned Sr. AR for Revenue on the other hand strongly opposed for condonation of delay and submitted that, the assessee could not explain day-to- day delay reasons before the Tribunal and, therefore, 3 ITA.No.1276/Hyd./2024 submitted that, the delay condonation petition filed by the assessee should be dismissed in the interest of justice. 4. We have gone through the affidavit filed by the assessee. We find that, admittedly, the reasons explained by the assessee are beyond his control. The Hon’ble Supreme Court in the case of Collector, Land Acquisituon vs., MST Katiji [1987] 167 ITR 471 (SC) has laid down certain principles for condoning the delay and also directed the lower courts to follow a lenient approach for condoning the delay. Going by the principles laid down by the Hon’ble Supreme Court in the case of MST Katiji (supra), there is no dispute if an appeal is dismissed on account of technicalities, a meritorious case may be thrown-out of judicial review. Therefore, while condoning the delay, the courts must have a liberal approach or lenient approach considering the reasons given by the petitioners or appellants. Therefore, going by the principles laid down by the Hon’ble Supreme Court in the case of MST Katiji (supra) and also considering the submissions of the assessee, we 4 ITA.No.1276/Hyd./2024 condone the delay of 101 days in filing the appeal before the Tribunal and admit the appeal for adjudication. 5. Brief facts of the case are that, the assessee is an individual and filed his return of income for the assessment year 2020-2021 on 31.05.2021 declaring total income of Rs.NIL with loss of Rs.30,20,347/-. The case was selected for scrutiny to verify the income from liquor business i.e., low income from TCS receipts/liquor. During the course of assessment proceedings, the Assessing Officer noticed that, the assessee has made time deposit of Rs.50 lakhs with ICICI Bank and same has not been recorded in the books of accounts of the assessee. The Assessing Officer called-upon the assessee to file documentary evidences in respect of source for time deposit made with ICICI bank. In response, the assessee submitted that, he has received Rs.50 lakhs gift from his son who is a resident of USA and for this purpose, the assessee has filed a Gift Deed. The Assessing Officer after considering relevant explanation of assessee and also considering the Gift Deed submitted by the assessee observed that, the assessee has received Gift in the 5 ITA.No.1276/Hyd./2024 financial year 2019-2020, whereas, the Gift Deed claimed to have been entered into on 15.09.2022. Further, the assessee could not establish the relationship between the Donor and the Donee and, therefore, rejected the explanation of assessee and made addition of Rs.50 lakhs towards source for time deposit with ICICI bank as unexplained investment u/sec.69 of the Income Tax Act, 1961 [in short \"the Act\"]. 6. Aggrieved by the assessment order passed by the Assessing Officer, the assessee preferred appeal before The learned CIT(A). Before the learned CIT(A), the assessee neither appeared nor filed any details to justify his case. Therefore, the learned CIT(A) disposed off the appeal filed by the assessee for non-prosecution and upheld the addition made by the Assessing Officer towards source for the time deposit of Rs.50 lakhs made with ICICI bank as unexplained investment. 7. Aggrieved by the order of the learned CIT(A), the assessee is now in appeal before the Tribunal. 6 ITA.No.1276/Hyd./2024 8. CA, GBS Maitreya, Learned Counsel for the Assessee submitted that, the learned CIT(A) erred in sustaining the addition made by the Assessing Officer towards source for time deposit in ICICI bank for Rs.50 lakhs, even though, the assessee has filed relevant evidences including bank statement of the assessee and his son along with Gift Deed to prove the source. Learned Counsel for the Assessee further submitted that, the assessee’s son is a green card holder in USA and out of his income, he has transferred a sum of Rs.50,03,700/- on 11.10.2019 to assessee’s bank account and the same is the source for time deposit in ICICI Bank account. Although, these evidences has been furnished to the Assessing Officer and the learned CIT(A) but, the learned CIT(A) dismissed the appeal filed by the assessee for non-prosecution, without considering the evidences filed by the assessee. 9. Dr. Sachin Kumar, Learned Sr. AR for the Revenue, on the other hand, supporting the order of the learned CIT(A) submitted that, the assessee claimed to have received the amount from his son on 11.10.2019. Further, 7 ITA.No.1276/Hyd./2024 the Gift Deed shows that, the amount has been received on 15.09.2022. Further, there is no relationship has been declared in the Gift Deed and also the occasion has not been specified. In absence of the relevant details, the CIT(A) has rightly rejected the claim of the assessee towards the source for time deposit in the bank account and thus, the order of the learned CIT(A) should be upheld. 10. We have heard both the parties, perused the material on record and gone through the orders of the authorities below. The Assessing Officer made addition of Rs.50 lacs towards source for time deposit with ICICI bank on the ground that, the assessee could not explain the source for the same with known source of income. It was the explanation of the assessee that, he has received a sum of Rs.50,03,700/- on 11.10.2019 from his son who is resident of USA and the same has been kept with ICICI Bank in time deposit. We find that. the assessee has filed the relevant Bank account statement of his son Shri Raghav Reddy Beeragudem held at USA and as per the said bank statement, Shri Raghav Reddy Beeragudem has transferred 8 ITA.No.1276/Hyd./2024 71000 USD on 09.10.2019 to the appellant’s bank account held with ICICI bank and the fund has been credited on 11.10.2019. Further, on perusal of the bank account of the assessee, the assessee has made two fixed deposits of Rs.25 lakhs each on 27.11.2019, out of amount received from Shri Raghav Reddy Beeragudem on 19.10.2019. From the details filed by the assessee, it is undisputedly clear that, the source for time deposit with ICICI Bank is, fund received from Shri Raghav Reddy Beeragudem from his bank account held at USA. Therefore, to this extent, the explanation of assessee towards the source for time deposit is bonafide and acceptable. 11. In so far as the Gift received by the assessee from his son is considered, the Gift Deed is silent about the relationship of the Donor and the Donee. Further, the assessee could not file any other evidence to prove father and son relationship. Although, the assessee filed the copy of passport of Shri Raghav Reddy Beeragudem, but, the name of the assessee is not appearing in the said passport. Therefore, in our considered view, the assessee could not 9 ITA.No.1276/Hyd./2024 establish relationship with Shri Raghav Reddy Beeragudem with relevant evidences. If the relationship is not proved, then, Gift received by an individual is taxable. To this extent, the facts needs to be verified by the Assessing Officer. Thus, we set-aside the order of the learned CIT(A) and restore the issue back to the file of Assessing Officer for verification of the facts. In case, the assessee is able to establish father and son relationship between the Donor and the Donee, then, the Assessing Officer is directed to delete the addition made towards source for time deposit of Rs.50 lakhs with ICICI Bank. 12. In the result, the appeal of Assessee is partly allowed. Order pronounced in the open Court on 16.07.2025. Sd/- Sd/- [VIJAY PAL RAO] [MANJUNATHA G] VICE PRESIDENT ACCOUNTANT MEMBER Hyderabad, Dated 16th July, 2025 VBP 10 ITA.No.1276/Hyd./2024 Copy to 1. Mr. Venkat Reddy Beeragudem, 13-6-438/128, Satyanarayana Nagar Colony, Gudi Malkapur, Hyderabad – 500 028. Telangana. 2. The Income Tax Officer, Ward-13(1), Ayakar Bhavan, Hyderabad – 500 029. Telangana. 3. The Pr. CIT, Hyderabad 4. The DR ITAT “B” Bench, Hyderabad. 5. Guard File. //By Order// //True Copy// "