KAGLIHALLI VENKATESH NAVEENKUMAR,BANGALORE vs. INCOME TAX OFFICER WARD 7(2)(3), BENGALURU, BENGALURU

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of ld. CIT(A)/NFAC dated 28.11.2023 vide DIN & Order No: ITBA/NFAC/S/250/2023-24/1058269412(1) passed u/s. 250 of the Income Tax Act, 1961 (in short “the Act”) for the AY 2020-21.

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ITA No.2517/Bang/2025 Kaglihalli Venkatesh Naveenkumar, Bengaluru Page 4 of 28 3. At the outset, the ld. A.R. of the assessee submitted that there is a delay of 639 days in filing the appeal before this Tribunal. The ld. A.R. of the assessee also drew our attention on an application for condonation of delay dated 31/10/2025 filed along with an affidavit in original sworn before the notary public stating the reasons for the delay which are reproduced below for ease of reference and record:

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ITA No.2517/Bang/2025 Kaglihalli Venkatesh Naveenkumar, Bengaluru Page 10 of 28 prescribed time. The explanation therefore, becomes relevant to determine whether the same reflect sufficient and reasonable cause on the part of the assessee in not filing these appeals within the prescribed time. We have gone through the reasons explained by the assessee in which we take note of the fact that the assessee was completely unaware of an order u/s. 250 of the Act being passed as neither any hard copy of the order was sent by the AO nor his friend Mr. Murali could intimate about passing of an Order u/s. 250 of the Act as the email sent by the Authority went to the spam folder. During the third week of October, 2025, the assessee received a call from the JAO directing the assessee to pay the outstanding amount of Rs.2,57,87,695/- for the AY 2020-21 and thereafter the assessee became aware immediately contacted his tax consultant, who advised him to file an appeal before the Tribunal with an application for condonation of delay.

6.1 While considering a similar issue the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder:

(1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late.

(2) Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. (3) 'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, commonsense and pragmatic manner.

(4) When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a nondeliberate delay.

ITA No.2517/Bang/2025 Kaglihalli Venkatesh Naveenkumar, Bengaluru Page 11 of 28 (5) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.

6.2 When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of nondeliberate delay. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. As observed by Apex Court, if the application of the assessee for condoning the delay is rejected, it would amount to legalize injustice on technical ground when the Tribunal is capable of removing injustice and to do justice. Therefore, this Tribunal is bound to remove the injustice by condoning the delay on technicalities. If the delay is not condoned, it would amount to legalizing an illegal order which would result in unjust enrichment on the part of the State by retaining the tax relatable thereto. Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorized by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalize an illegal and unconstitutional order passed by the lower authority.

6.3 Further, in the case of People Education & Economic Development Society Vs/ ITO reported in 100 ITD 87 (TM) (Chen), wherein held that “when substantial justice and technical consultation are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of non-deliberate delay”.

ITA No.2517/Bang/2025 Kaglihalli Venkatesh Naveenkumar, Bengaluru Page 12 of 28 6.4 The next question may arise whether delay was excessive or inordinate. There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not filing the appeal. We have to see the cause for the delay. When there was a reasonable cause, the period of delay may not be relevant factor. In fact, the Madras High Court in the case of CIT vs. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered the condonation of delay and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Accordingly, the Madras High Court condoned nearly 21 years of delay in filing the appeal. When compared to 21 years, 639 days cannot be considered to be inordinate or excessive. Furthermore, the Chennai Tribunal by majority opinion in the case of People Education and Economic Development Society (PEEDS) v. ITO (100 ITD 87) (Chennai) (TM) condoned more than six hundred days delay. Therefore, in our opinion, by preferring the substantial justice, the delay of 639 days has to be condoned and accordingly we condone the delay and admit the appeal for adjudication.

ITA No.2517/Bang/2025 Kaglihalli Venkatesh Naveenkumar, Bengaluru Page 13 of 28 iii) Agricultural Income

Accordingly, the notices u/s. 143(2) and 142(1) of the Act along with the show cause notices were issued calling for information from time to time. The assessee was also granted opportunity through video conference. In response to the notices, the assessee filed his replies/submissions on various dates giving partial information.

7.1 As per the information available on record, the assessee had large cash deposits to the tune of Rs.5,21,23,520/- in his current account maintained with Bank of Baroda (Vijaya Bank). The assessee submitted that all cash deposits were corresponding to the sales made during the year and were already subjected to Income Tax. Further, with regard to cash deposits the assessee submitted that he runs a crusher and manufacture sand which is the key ingredient in civil construction business. The “M Sand” is sold to various customers who buy from the assessee and sales the same in the open market. The assessee sold the “M Sand” only against cash due to high collection risk and risk of higher bad debts. During the course of assessment proceedings, the assessee produced the sales summary along with sales register. As the source for the cash deposits amounting to Rs.77,32,120/- [difference of Cash deposits of Rs.5,21,23,520 (–) sales turnover of Rs.4,43,91,400] remains unexplained, the AO issued show cause notice as to why the same should not be treated as unexplained income and added to the returned income. The assessee again by submitting the bank current account statement reiterated that since his customer are all from unorganized sector, the sales were made against cash and hence all cash deposits are corresponding to sales made during the year. The ld. AO observed that even if the contention of the assessee that the cash deposits were out of sale

ITA No.2517/Bang/2025 Kaglihalli Venkatesh Naveenkumar, Bengaluru Page 14 of 28 proceeds is accepted, it is noticed that the assessee’s total sales comprised of Rs.4,43,91,400/- as against cash deposits of Rs.5,21,23,520/- and therefore the balance amount of cash deposits of Rs.77,32,120/- remain unexplained. During the course of assessment proceedings, the assessee submitted that the assessee had also deposited cash out of the amount received from sale of agricultural produce of Rs.33,71,219/- and unsecured loan of Rs.50,00,000/- as well as certain advances paid by the customers for purchase of the M Sand. The AO did not accept the contention of the assessee in the absence of any Corroborative evidence in support of the agricultural income earned, the agricultural income of Rs.33,71,219/- was treated as income from other sources. The AO held that since the genuineness of the agricultural income itself is not proved and the same is treated as income from other sources, the contention of the assessee that the agricultural income is the source of cash deposits cannot be accepted.

7.2 In respect of assessee’s contention that the unsecured loan of Rs.50,00,000/- taken during the previous year is the source of cash deposit, the AO held that as the assessee could not produced any details of the persons from whom the loan taken or confirmation letters from the lenders and therefore the assessee could not establish the identity, genuineness and credit worthiness of the lenders and accordingly did not consider as source of cash deposits. Further, the AO held that as the assessee had also not furnished any evidence in support of advances received from the customers and therefore the assessee’s contention that advances from customers is the source for cash deposits was also not accepted by the AO. In view of the above an amount of Rs.77,32,120/- was treated as unexplained cash credits u/s.68 of

ITA No.2517/Bang/2025 Kaglihalli Venkatesh Naveenkumar, Bengaluru Page 15 of 28 the Act r.w.s 115BBE of the Act and added to the total income of the assessee.

7.3 Regarding high creditors/ liabilities, the AO observed that as per the balance sheet furnished, the assessee had declared unsecured loans amounting to Rs.5,37,25,000/- under the head “loans”. The assessee had also declared sundry creditors amounting to Rs.3,88,78,577/- in the balance sheet. With regard to high liabilities, the assessee submitted that the liability shown as unsecured loan is from his aunt “Smt. Susheelamma” amounting to Rs. 4,87,25,000/- out of which an amount of Rs.3,81,00,000/- was taken through bank during the earlier years. Further, it is submitted that an amount of Rs. 1,09,25,000/- was received during the FY 2019-20 through proper banking channels. During the course of assessment proceedings, the assessee submitted confirmation letter from the lender Smt. Susheelamma to the tune of Rs.4,87,25,000/- along with the Bank statement of Smt. Susheelamma for the period 12/09/2017 to 0/04/2019 as well as the details of loans and advances, car loan, equipment loan and crusher loan. The assessee had also submitted the confirmation letters in respect of advance amounting to Rs.5,58,000/- received from Sri. Muralidhara S.A. and advance of Rs.13,97,000/- received from Sri. Muniraju during the FY 2019-20 and also confirmation letter in respect of the advances given by the assessee to M/s. Amman Electricals, sanction letter from HDFC Bank for secured loan. The assessee also furnished the summary of sundry creditors showing net balance of Rs.3,88,78,577/-. Subsequently, the assessee had also furnished copy of ledger account, copy of Aadhar of Smt. Susheelamma and bank statement reflecting the amount of Rs. 1,09,25,000/- taken from her on various dates during the FY 2019-20 and an amount of Rs.3,00,000/- repaid during the year. Further, in respect of the

ITA No.2517/Bang/2025 Kaglihalli Venkatesh Naveenkumar, Bengaluru Page 16 of 28 balance amount of Rs.50,00,000/- of unsecured loans, the assessee did not submit any information. During the course of assessment proceedings, the assessee furnished the bank statements in the name of M/s. Chamundeshwari Stone Crushers for the period from 01/04/2019 to 31/03/2020, confirmation letter from Smt. Susheelamma along with her bank account statement for the period 12/09/2017 to 30/04/2019, copy of Form 26AS, summary of sundry creditors, loans sanction letters from HDFC Bank and machines suppliers letter from Puzzolana Machinery Fabricators, confirmations letters from M/s. Amman Electricals Co. and M/s. Murali & Co. The AO noted that out of the total unsecured loans of Rs.5,37,25,000/- shown in the balance sheet, the assessee claimed to have barrowed Rs.4,87,25,000/- from his aunt Smt. Susheelamma and out of which Rs.3,81,00,000/- was taken during the earlier years and the balance amount of Rs.1,09,25,000/- was received during the current FY 2019-20 & Rs. 3,00,000/- being repaid during the year. The AO was of the opinion that though the assessee has furnished the bank statement reflecting the amount of Rs.3,81,00,000/- taken on various dates from Smt. Susheelamma during the FY 2017-18 & 2018-19, the assessee had not furnished any details or documentary evidence on support of the unsecured loan received during the FY 2019-20. The AO held that in the absence of any documentary evidence such as complete address of the lender, PAN and income tax returns of Smt. Susheelamma for the FY 2019-20, the identity and creditworthiness of the lender and genuineness of the transaction is not established. In view of the above, in the absence of any information/ documentary evidence in support of unsecured loan of Rs.1,06,25,000/- [Rs.4,87,25,000/- (-) Rs. 3,81,00,000/-) received from Smt. Susheelamma during the FY 2019-20 and other unsecured loan of Rs.50,00,000 , the AO

ITA No.2517/Bang/2025 Kaglihalli Venkatesh Naveenkumar, Bengaluru Page 17 of 28 issued another show cause notice as to why the same should not be added back to the income returned.

7.4 The assessee furnished the details of transfer to M/s. Chamundeshwari Stone Crushers from the saving account of Smt. Susheelamma by submitting the bank statement for the period 12/09/2017 to 30/03/2020, ledger account copy, copy of Aadhar of Smt. Susheelamma. The details of which are as below:- Date Cheque No Amount 14/05/2019 14378835 1,25,000 06/06/2019 14378836 10,00,000 18/06/2019 14378837 8,00,000 19/08/2019 14378840 5,00,000 19/09/2019 14378841 10,00,000 20/08/2019 -3,00,000 04/12/2019 14378842 10,00,000 06/12/2019 14378843 10,50,000 13/12/2019 14378844 10,00,000 27/12/2019 14378845 4,00,000 17/01/2020 14378846 3,50,000 27/01/2020 14378847 15,00,000 04/02/2020 14378848 10,00,000 24/02/2020 14378849 3,00,000 03/03/2020 14378850 9,00,000 TOTAL 1,06,25,000

The AO however in the absence of PAN/ IT returns and complete address of the lender Smt. Susheelamma did not accept the contention of the assessee. Further, the AO also held that in the absence of source of income of Smt. Susheelamma for giving such huge amount of loan to the assessee, the genuineness of the transaction and creditworthiness of the lender is also not established and accordingly the unsecured loan of Rs.1,06,25,000/- (4,87,25,000 – Rs.3,81,00,000) taken from Smt.

ITA No.2517/Bang/2025 Kaglihalli Venkatesh Naveenkumar, Bengaluru Page 18 of 28 Susheelamma during the FY 2019-20 was treated as unexplained cash credit u/s. 68 of the Act in the hands of the assessee. Further, in respect of the other unsecured loan of Rs.50,00,000/- as the assessee did not furnish any information such as name and address of the persons from whom loan taken, confirmation letters and documentary evidence, the AO held that the assessee failed to prove the identity, genuineness and creditworthiness of the lenders and hence the amount of Rs.50,00,000/- was also treated as unexplained cash credit u/s. 68 of the Act r.w.s 115BBE of the Act and added the same to the income of the assessee.

7.5 Further, during the course of assessment proceeding, the AO noticed that the assessee had declared net agricultural income of Rs.33,71,219/- in the return of income filed for AY 2020-21. The assessee submitted that he had cultivated the agricultural land in the name of his father and some of the lands were taken on lease. The assessee had also furnished the details of the agricultural lands owned by his father along with the copy of lease deed for the agricultural land taken on lease. During the course of assessment proceedings, the assessee submitted that agricultural produce comprises of fruits, vegetables and some commercial crops. The assessee also submitted that none of the agricultural produce had been sold through formal channels such as APMC/ regulated market etc. All the agricultural produce had been transacted through a hybrid method of cash and bank transactions for which formal invoices had never been raised. Further, in response to the show cause notice, the assessee produced copy of lease deed for 10 acres of land taken on lease and agricultural land documents of 6.96 acres owned by his father. However, the AO observed that the assessee had not submitted any documentary evidence in support of his agricultural activities undertaken by him like crops grown/ agricultural produce, sale bills and expenditure

ITA No.2517/Bang/2025 Kaglihalli Venkatesh Naveenkumar, Bengaluru Page 19 of 28 incurred etc. and accordingly did not accept the contention of the assessee. The assessee again submitted that there was an existing mango groove on the ten acres of land taken on lease which is duly mentioned in the rental agreement. Devanahalli Taluk in Bangalore Rural District is well known for grape framing. It is also submitted that in the land owned by the father of the assessee, the assessee had cultivated seasonal fruits, vegetables and certain other commercial crops. The assessee also explained the modus operandi by stating that the farms or agricultural fields are let out to harvesting agents for harvesting and these harvesting contractors ultimately harvest, process and make the agricultural produce fit for the market and ultimately take the produce to the market. The assessee also submitted that on an average 1 acre of mango groove would yield a net annual income of Rs.1,50,000 to Rs.2,50,000/- and 1 acre of grape farm will yield an income of anywhere between Rs.5,00,000/- to Rs.8,00,000/-. Based on above, the agricultural income offered to tax amounting to Rs.33,71,219/- is quiet reasonable.

7.6 The AO however did not accept the contention on the following grounds:-

i) The assessee had not produced any documentary evidence like crops grown, yield per acre, bills for sale of agricultural produce and bills and vouchers for the expenditure incurred etc.

ii) Further, in respect of agricultural income stated to had been earned from the agricultural land belongs to his father, the assessee cannot claim the entire agricultural income as his own and assessee has to share the income with his father.

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iii) The assessee did not produce any agreement with his father in respect of his share of agricultural income.

iv) Assessee has shown NIL agricultural income in the AY 2019-20 and all of sudden during current AY 2020-21 the assessee had shown agricultural income of Rs.33,71,219/-.

v) In the return of income for AY 2020-21, the assessee in “schedule EI details of exempt income” had given the details of 5 acres and 2.5 acres of agricultural land and had not mentioned anything about 10 acres of agricultural land taken on lease and therefore the same is an afterthought and not genuine.

vi) There should be evidence to show that agricultural activities were carried out on those agricultural lands.

In view of the above and in absence of any corroborative evidence in support of the agricultural income earned, the AO did not accept the contention of the assessee and the entire agricultural income of Rs.33,71,219/- was treated as income from other sources and added to the total income of the assessee.

7.7 Thus, the AO completed the assessment proceedings on a total assessed income of Rs.2,84,80,469/- as detailed below:-

Sl.No Description Amount (in INR) 01 Income as per Return of Income Filed 17,52,130

ITA No.2517/Bang/2025 Kaglihalli Venkatesh Naveenkumar, Bengaluru Page 21 of 28 02 Income as computed u/s. 143(1)(a) - 03 Variation in respect of issue “addition 33,71,219 towards Agriculture income treated as Income from Other Sources” - as discussed in para 3.7.1. 04 Variation in respect of issue “addition 1,56,25,000 unsecured loans treated as unexplained cash credits u/s. 68” - as discussed in para 3.7.2. 05 Variation in respect of issue of 77,32,120 addition towards cash deposits treated as unexplained cash credits u/s. 68- as discussed in para 3.7.3. 06 Total income determined 2,84,80,469

ITA No.2517/Bang/2025 Kaglihalli Venkatesh Naveenkumar, Bengaluru Page 22 of 28 assessee has also filed a paper book comprising of 132 pages containing therein the various documents/ records as relied upon by the assessee. Before us, the ld. A.R. of the assessee also filed some confirmation letters towards loans and advances taken/accepted.

ITA No.2517/Bang/2025 Kaglihalli Venkatesh Naveenkumar, Bengaluru Page 23 of 28 loans amounting to Rs.5,37,25,000/- and also declared sundry creditors amounting to Rs.3,88,78,577/- in the balance sheet. Undisputedly, the case of the assessee was selected for limited scrutiny to examine the above issues. Now with regard to the agriculture income declared by the assessee amounting to Rs. 33,71,219/- regarded by the AO as income from other sources, we observed that during the course of assessment proceedings, the assessee submitted the copy of agriculture land documents of 6.96 acres owned by his father along with copies of lease deed for 10 acres of land taken on lease. Further, the assessee submitted that there was an existing mango groove on the 10 acres of land taken on lease which is also duly mentioned in the rental agreement. Further, the assessee submitted that Devanahalli taluk in Bangalore Rural district is well known for grape farming. In the land owned by his father, the assessee had cultivated seasonal fruits and vegetables and certain other commercial crops. The assessee, during the course of assessment proceedings explained the modus operandi of his agriculture operation & submitted that the farms or agricultural fields are let out to harvesting agents for harvesting and these harvesting contractors ultimately harvest, process and make the agriculture produce fit for the market and ultimately take the produce to the market. The assessee had also categorically stated that none of the agriculture produce had been sold through formal channels such as APMC/Regulated markets and all the agricultural produce had been transacted through a hybrid method of cash and bank transactions. The AO on the other hand disbelieved the contentions of the assessee by merely stating that assessee had not submitted any evidence in support of agriculture activities undertaken likes crops grown/agricultural produce, sales bill & expenditure incurred etc. We observed that the assessee, during the course of assessment proceedings had elaborately submitted the modus operandi of his agriculture

ITA No.2517/Bang/2025 Kaglihalli Venkatesh Naveenkumar, Bengaluru Page 24 of 28 operation along with the types of crop grown/agriculture produce. The assessee had also submitted that none of the agriculture produce had been sold through formal channels such as APMC/Regulated markets, therefore in our opinion the formal sales bill are generally not in practice for sales of agricultural produce unlike other business. Further, merely the assessee had not given any agreement with his father in respect of his share of agricultural income, it is not established that no agriculture activity had been carried out. Further, merely the assessee had in “schedule EI details of exempt income” had given the details of 5 acres and 2.5 acres of agricultural land and had not mentioned anything about 10 acres of agricultural land taken on lease and therefore it cannot be said to have an afterthought and not genuine especially when the assessee produced all the copies of the lease agreement before the AO. We are of the considered opinion that merely on the basis of some assumption & surmises, the AO treated the entire agriculture income as income under head “income from other sources” without any adverse material being brought on record to show that the assessee is not into agriculture operation. In our opinion, the AO has merely acted on the basis of surmises and conjectures in adopting the Net agricultural income as “income from other sources” without carrying out any further verification. The suspicion however strong cannot take the place of proof. In this case, none of the authorities below have brought any substantial material on record to demonstrate that assessee had not earned Income through agricultural sources but from “income from other sources”. Therefore, we allow this ground of appeal & direct the AO to accept the agriculture income of Rs.33,71,219/- as claimed by the assessee.

ITA No.2517/Bang/2025 Kaglihalli Venkatesh Naveenkumar, Bengaluru Page 25 of 28 the Act. The assessee during the course of assessment proceedings, submitted that the liability shown as unsecured loan is from his aunt “Smt. Susheelamma” amounting to Rs. 4,87,25,000/- out of which an amount of Rs.3,81,00,000/- was taken through bank during the earlier years. Further, it is submitted that an amount of Rs. 1,09,25,000/- was received during the FY 2019-20 through proper banking channels. During the course of assessment proceedings, the assessee submitted the confirmation letter from his Aunt Smt. Susheelamma to the tune of Rs.4,87,25,000/- along with the Bank statement of Smt. Susheelamma for the period 12/09/2017 to 0/04/2019. The assessee also submitted the copy of ledger account as well as copy of Aadhar. We are of the considered opinion that the AO had accepted the earlier year’s unsecured loan of Rs. 3,81,00,000/- taken from Smt. Susheelamma. Further, the AO had also accepted the current year’s loan of Rs. 3,00,000/- taken from his aunt Smt. Susheelamma & also returned back during the year under consideration. However disbelieved the Net unsecured loan of the current year amounting to Rs. 1,06,25,000/- only on the ground that the assessee did not produce the copy of PAN/I T Returns & complete address of the lender Smt. Susheelamma. In our opinion, the assessee during the course of assessment proceedings had already submitted the copy of the Aadhar of Smt. Susheelamma as observed by the AO himself & therefore the contention of the AO that address of the lender was not furnished is completely baseless. Further, before us, the AR of the assessee also submitted the copy of Aadhar, confirmation letter, ledger Account, Bank Statement & details of date wise acceptance of unsecured loan & submitted that Smt. Susheelamma had sold an immovable property & had advanced loan of Rs. 4,87,25,000/- out of the sales proceeds of the immovable property. In view of the above, as the AO had already accepted the loan of Rs. 3,81,00,000/- taken during earlier years & also out of the

ITA No.2517/Bang/2025 Kaglihalli Venkatesh Naveenkumar, Bengaluru Page 26 of 28 unsecured loan of Rs. 1,09,25,000/- taken during the year under consideration, Rs. 3,00,000/- was also accepted & therefore we find no merits in adding the balance amount of Rs.1,06,25,000/- taken from the same person as unexplained cash credits especially when all the loans were accepted through proper banking channels. Accordingly, we direct the AO to delete the addition of Rs.1,06,25,000/-.

14.1 Now with regard to the issue of addition towards unsecured loans of Rs. 50,00,000/- treated as unexplained cash credits, admittedly the assessee during the course of assessment proceedings could not furnish any information such as name & address of the persons from whom loan taken, confirmation letters and documentary evidence in support of the same. The AO held that the assessee has failed to discharge the onus cast upon him to prove the identity, genuineness and creditworthiness of the lenders. We observed that even in the proceedings before the ld. CIT(A)/NFAC, the assessee could not furnish any information about the unsecured loan of Rs.50 Lakhs, accordingly the ld. CIT(A)/NFAC confirmed the same. Before us, the AR of the assessee produced one confirmation letter from Mr. Sadiq Basha of M/s MKT Fruits who stated to have given cash advances of Rs.50,00,000/- towards purchase of fruits (Mango & grapes) from the assessee. However, we observed that the assessee has not filed any application for accepting the additional evidence produced for the first time before us. This being so, in the interest of justice, equity & fair play, we deem it fit & proper to remit this issue to the file of the AO to decide a fresh in accordance with law after due verification of the confirmation letter dated 22/09/2022 filed before us. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. Accordingly this ground of appeal is partly allowed for statistical purposes.

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Order pronounced in the open court on 23rd July, 2026

Sd/- Sd/- (Prashant Maharishi) (Keshav Dubey) Vice President Judicial Member

Bangalore, Dated 23rd July, 2026. VG/SPS

Copy to:

By order

Asst. Registrar, ITAT, Bangalore.