VIJAYA JYOTHI TALLAPAKA,HYDERABAD vs. ITO (INTL TAXATION)-2, HYDERABAD

The A.O., after considering the submissions of the assessee, observed that, the assessee had failed to satisfactorily explain the source for purchase of the immovable property of Rs.85,00,000/- and payment of stamp duty/registration charges of Rs.5,10,150/-, aggregating to Rs.90,10,150/-. Therefore, the A.O. treated the said amount as unexplained investment under section 69 of the Act and brought it to tax under section 115BBE of the Act. The A.O. further observed that, the assessee had made fixed deposits of Rs.25,00,000/- in HDFC Bank and Rs.94,80,731/- in Corporation

The assessee filed objections before the Ld. DRP against the draft assessment order and raised various contentions on the additions made by the A.O. towards unexplained investment under section 69 for purchase of the property and also the addition towards unexplained investment in fixed deposits in various banks. The Ld. DRP, vide directions under section 144C(5) of the Act dated 22.12.2025, accepted the explanation of the assessee with regard to the source for purchase of the property and deleted the addition of Rs.90,10,150/- made under section 69 of the Act. Insofar as the addition of Rs.1,19,80,731/- is concerned, the Ld. DRP sustained the addition on the ground that although the assessee claimed that the fixed deposits were made out of funds available in her NRE account, no supporting

In pursuant to the Ld. DRP's directions, the A.O. passed the final assessment order under section 147 r.w.s. 144C(13) dated 29.12.2025 and determined the total income at Rs.1,30,99,128/- by making an addition of Rs.1,19,80,731/- towards unexplained investment under section 69 of the Act. The final assessment order passed by the A.O. pursuant to the directions of the Ld. DRP is now in appeal before the Tribunal.

Aggrieved with the final assessment order, the assessee is now in appeal before the Tribunal.

The Ld. Counsel for the assessee, Shri Pavan Kumar Gorti, C.A., submitted that the assessee could not file complete documentary evidence with regard to the fixed deposits with HDFC Bank and Corporation Bank, either before the A.O. or 6 Vijaya Jyothi T before the Ld. DRP. The assessee has filed a petition for admission of additional evidence along with the relevant bank account statements. As per the relevant bank account statements, the fixed deposits with HDFC Bank had been made out of the opening balance available in the assessee's NRE bank account. Similarly, the fixed deposits with Corporation Bank had been made out of the renewal proceeds of the earlier fixed deposits made in the year 2010. Since these evidences were not filed before the A.O. or the Ld. DRP, the matter may be restored to the file of the A.O. to enable the assessee to explain her case with the relevant details.

The learned CIT-DR for the Revenue, Ms. Seema Meena, on the other hand, fairly agreed that since the assessee had filed additional evidence to explain the investments in the fixed deposits, the matter may be remanded to the file of the A.O. for verification.

We have heard both the parties, perused the material available on record and had gone through the orders passed by the authorities below. The assessee is an NRE and maintains NRE bank accounts with HDFC Bank and Corporation Bank. The A.O. made the addition towards fixed deposits in HDFC Bank and 7 Vijaya Jyothi T Corporation Bank on the ground that the assessee had not explained the source for the fixed deposits, except stating that the source for the above fixed deposits was funds available in her NRE bank accounts sourced from outside India. The assessee has furnished a petition for admission of additional evidence and filed the bank account statements of HDFC Bank and Corporation Bank. From the bank account statements submitted by the assessee, we find that the assessee is maintaining NRE accounts with Corporation Bank and HDFC Bank. The fixed deposits made with HDFC Bank were out of the opening bank balance available in the HDFC Bank NRE account. In the said bank account, there are no other credits for the year under consideration except withdrawals. Similarly, the fixed deposits made with Corporation Bank were out of the renewal proceeds of the earlier fixed deposits originally made in the financial years 2011-12 and 2013-14. From these details, it appears that the source for the fixed deposits with HDFC Bank and Corporation Bank was from known sources of income. However, the fact remains that these evidences were not filed before the A.O. and the Ld. DRP, and the assessee has filed these evidences in the form of additional evidence for the first time before the Tribunal. Therefore, we are of the considered view that,

In the result, the appeal filed by the assessee is allowed for statistical purposes.

The Principal Commissioner of Income Tax, (IT & TP), Hyderabad.

The Disputes Resolution Panel-1, Bangalore 5. तवभागीयप्रतततनतर्, आयकर अिीिीय अतर्करण, हैदराबाद / DR, ITAT, Hyderabad 6. गार्ाफ़ाईि / Guard file