GADDAM USHASHRI,HYDERABAD vs. ITO, WARD - 8(1), HYDERABAD

It was further submitted that the delay in filing the appeal was neither wilful nor deliberate but occurred due to unavoidable circumstances beyond the control of the assessee. The learned counsel for the assessee submitted that the assessee was desirous of challenging the impugned order and was in the process of identifying and engaging a suitable tax professional to examine the matter and advise the appropriate legal remedy. It was submitted that the assessee ultimately engaged the present counsel during the month of October, 2025 and, upon being advised to prefer an appeal before the Tribunal, acted with utmost promptitude and filed the present appeal without any further delay. Therefore, it was submitted that the delay had occurred due to bona fide reasons and not on account of any deliberate negligence or mala fide intention. Accordingly, it was prayed that the delay of 60 days in filing the appeal before the Tribunal may kindly be condoned in the interest of justice.

The learned Senior A.R. for the Revenue, Shri B. Laxmi Kanth, on the other hand, opposed the condonation petition filed by the assessee. He submitted that the assessee has failed to file the appeal within the prescribed period and, therefore, the delay may not be condoned. However, he fairly submitted that the issue may be decided in accordance with law on the basis of the facts and material available on record.

We have heard both the parties, perused the petition and affidavit filed by the assessee seeking condonation of delay of 60 days in filing the appeal before the Tribunal. We find that, the reasons explained by the assessee appear to be genuine and bona fide and come under 'sufficient cause'. We further find that, the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji, reported in 167 ITR 471 (SC), has laid down certain principles for condoning the delay and directed that a lenient approach should be followed to avoid dismissal of meritorious cases on technical grounds. Going by the principles laid down in Mst. Katiji (supra), and also considering the submissions of the assessee, we condone the delay of 60 days in filing the appeal before the Tribunal and admit the appeal for adjudication.

The brief facts of the case are that the assessee filed her return of income for A.Y. 2017-18 on 22.07.2017, admitting total income of Rs.64,880/-. The case was selected for scrutiny through CASS to verify the cash deposits during the demonetization period. During the course of assessment proceedings, the A.O. noticed that the assessee has made cash deposits to the tune of Rs.38,71,130/- during the demonetization period into ICICI and SBI bank accounts. The assessee explained the source for cash deposit out of cash withdrawals and re-deposited into bank accounts from ICICI and SBI for Rs.18,89,700/-. For the balance amount of Rs.19,81,430/-, it was claimed to have been sourced out of income from salary earned outside India during the years 2002-2006, and corresponding interest income earned out of the said money, and also cash available out of past savings. The A.O., however, was not convinced with the explanation of the assessee and accordingly made an addition of Rs.38,14,530/- under Section 69A of the Income-tax Act, 1961 as unexplained money and brought the same to tax under Section 115BBE of the Act.

Aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A). Before the learned CIT(A), the assessee explained the source for cash deposit out of cash withdrawn and re-deposited in the very same bank account to the tune of Rs.18,89,700/-. For the balance amount, the assessee claimed to have received gifts from father Gaddam Shankarlingam, brother Srikrishan Gaddam, and sister Shridevi Gaddam to the tune of Rs.15,00,000/-, for which affidavits from the donors were filed. Further, the balance amount was claimed to have been sourced out of past savings from salary income earned outside India and consequent interest. The learned CIT(A), after considering the submissions of the assessee, accepted the explanation of the assessee with regard to the source out of cash withdrawal and re-deposited from the very same bank account to the tune of Rs.18,89,700/-. Insofar as the balance amount of cash deposit claimed to have been sourced out of gifts of Rs.15,00,000/- from father Gaddam Shankarlingam, brother Srikrishan Gaddam, and sister Shridevi Gaddam, the learned CIT(A) rejected the explanation of the assessee on the ground that, except filing affidavits, no corroborative evidence in the form of bank statements of the donors evidencing the availability of such funds had been provided. The learned CIT(A) also rejected the claim of past savings from salary income and interest income. Thus, the learned CIT(A) has allowed relief to the extent of Rs.18,89,700/- and sustained the addition of Rs.19,24,830/- made towards cash deposits under Section 69A of the Act.

Aggrieved by the order of the learned CIT(A), the assessee is now in appeal before the Tribunal.

The learned counsel for the assessee, Shri Akash Deshpande, C.A. submitted that the learned CIT(A) erred in rejecting the explanation with regard to the gifts received from Gaddam Shankarlingam for Rs.4,00,000/-, Srikrishan Gaddam for Rs.5,00,000/-, and Shridevi Gaddam for Rs.6,00,000/-, even though the claims have been substantiated by filing affidavits where they claimed to have gifted the amount to the assessee on the occasion of her marriage and the subsequent occasion of birth of her daughter during the financial years 2013-14, 2014-15, and 2015-16. The learned counsel for the assessee further submitted that the A.O. and the learned CIT(A) disbelieved the claim of the assessee only on the ground that the assessee could not substantiate the claim with relevant evidence, but the fact remains that once the affidavits have been filed, it is as good as the declarants are confirming the contents of the said affidavits, which clearly shows that there is availability of source for gifting the amount to the assessee. Therefore, he submitted that the source explained out of gifts of Rs.15,00,000/- should be accepted and the addition made by the A.O. should be deleted.

Insofar as the balance amount of Rs.4,24,830/-, the assessee explained the source out of past savings being salary income earned outside India from 2002 to 2006 and consequent interest earned on the said income. Going by the social status of the assessee and the income declared for earlier years and pattern of cash withdrawals from the bank, the explanation of the assessee is bona fide and supported by relevant evidence. Therefore, the A.O. ought to have accepted the explanation of the assessee and therefore, he submitted that the addition made by the A.O. towards cash deposits of Rs.4,24,830/- should be deleted. In this regard, he relied upon the decision of the ITAT, Ahmedabad Bench in the case of Manubhai Dahyabhai Bhoi Vs. ITO reported in (2025) 181 taxmann.com 234, and also the decision of the ITAT, CIT(A), submitted that the assessee had taken a different stand and claimed that the balance amount of cash deposits was out of salary income, interest income, and past savings. Before the learned CIT(A), the assessee changed her stand and stated that she had received gifts of Rs.15,00,000/- from three family members. But the claim of gifts from family members has not been substantiated by filing relevant evidence, except filing affidavits. Mere filing of affidavits does not prove the creditworthiness of the donors. Insofar as the savings from the salary income earned outside India, no evidence has been furnished. The learned CIT(A), after considering the relevant facts, has rightly upheld the addition made by the A.O. Therefore, he submitted that the order of the learned CIT(A) should be upheld.

We have heard both parties, perused the material available on record and had gone through the orders of the authorities below. There is no dispute with regard to the amount of cash deposits into bank account and the explanation of the assessee for the source of the said cash deposits. In fact, the assessee has made cash deposits of Rs.38,71,130/- and claimed that the source for the said cash deposits was previous cash withdrawn and re-deposited in the very same bank account to the tune of Rs.18,89,700/-. The assessee further claimed that the balance amount of Rs.19,81,430/- was out of past savings being salary income earned outside India during the years 2002-2006 and interest income earned on the same. There is no dispute with regard to the source explained out of previous cash withdrawals because the learned CIT(A) has accepted the explanation and deleted the addition and the same has not been challenged by the Revenue. The dispute is only with regard to the balance cash deposits of Rs.19,81,430/-. Although the assessee has initially explained the source out of past savings but changed her stand before the learned CIT(A) and claimed that she has received gift from three family members, that is father Gaddam Shankarlingam, brother Srikrishan Gaddam and sister Shridevi Gaddam. The assessee has filed affidavits from three family members to substantiate the claim of gift and upon perusal of relevant gift deeds, we find that the donors have confirmed the payment of gift out of natural love and affection on various occasions including the occasion of marriage and birth of child, etc. It is customary in Indian society to give gifts on the occasion of marriage and other occasions like birth of child, etc. Going by the customary practice and the social status of the assessee family, in our considered view, the claim of the assessee that she has received gift from three family members appears to be bona fide and acceptable. Therefore, we direct the A.O. to delete addition towards cash deposit unexplained out of gift received from three family members to the extent of Rs.15,00,000/-.

Insofar as the balance amount of Rs.4,24,830/-, although the assessee claims to have sourced out of past savings being the salary income earned outside India during the years 2002-2006, and the consequent interest income, except a bald statement, no documentary evidence has been submitted to substantiate her arguments. The assessee could not substantiate her arguments with relevant evidence. In our considered view, the addition made by the A.O. towards cash deposits explained by the assessee out of past savings to the tune of Rs.4,24,830/- should be sustained. Therefore, we direct the A.O. to sustain addition to the tune of Rs.4,24,830/- towards cash deposits into bank account during the demonetization period under Section 69A of the Act. To sum up, out of total addition sustained by the learned CIT(A) for Rs.19,24,830/-, the assessee gets relief to the extent of Rs.15,00,000/-, and the balance amount of Rs.4,24,830/- has been confirmed.

In the result, the appeal filed by the assessee is partly allowed.

The Principal Commissioner of Income Tax, Hyderabad. 4. तवभागीयप्रतततनतर्, आयकर अिीिीय अतर्करण, हैदराबाद / DR, ITAT, Hyderabad 5. गार्ाफ़ाईि / Guard file