BAIRASANDRA KRISHNAPPA GANGADHAR,BANGALORE vs. ASSESSMENT UNIT , DELHI

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ITA 902/BANG/2026Status: DisposedITAT Bangalore20 July 2026AY 2017-185 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the additions were not justified as the assessee explained the cash deposits were made from earlier cash withdrawals from the same bank account. It also held that withdrawal from one's own bank account is not unexplained expenditure.

What were the facts?

The Assessing Officer made additions on account of cash deposits and cash withdrawals in the assessee's bank account, treating them as unexplained investment and expenditure respectively. The CIT(A) confirmed these additions.

What were the issues?

Whether cash deposits made from prior cash withdrawals from the same bank account are unexplained investments. Whether cash withdrawals from a disclosed bank account constitute unexplained expenditure.

Which sections of the Income-tax Act were involved?

Section 69,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, BANGALORE

Before: SHRI WASEEM AHMED & SHRI SANDEEP SINGH KARHAIL

For Appellant: Shri Deepak Padmanabhan, CA
For Respondent: Shri Senthil Kumar PM, JCIT (DR)
Hearing: 09.07.2026Pronounced: 20.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER

ITA No. 902/Bang/2026 Assessment Year: 2017-18 Bairasandra Krishnappa Gangadhar, Vs. The NFAC, No.51/7/1, Chitrakoot, Delhi. Ratna Avenue, Richmond Road, Bangalore – 560 025. PAN – ALKPB 5832 E APPELLANT RESPONDENT Assessee by : Shri Deepak Padmanabhan, CA Revenue by : Shri Senthil Kumar PM, JCIT (DR) Date of hearing : 09.07.2026 Date of Pronouncement : 20.07.2026 O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:

This appeal is directed against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, dated 16.01.2026 for the Assessment Year 2017-18.

2.

The interconnected issue raised by the assessee is that the learned CIT(A) erred in confirming the addition of ₹2,02,33,000/- made by the Assessing Officer on account of cash deposits and cash withdrawals reflected in the assessee's bank account.

ITA No.902/Bang/2026 Page 2 of 5 3. The assessee is an individual. During the course of assessment proceedings, the Assessing Officer examined the bank account of the assessee and noticed cash deposits of ₹44,50,104/- and cash withdrawals of ₹1,57,82,896/-. According to the Assessing Officer, the assessee failed to explain the nature and source of these transactions. Accordingly, the Assessing Officer treated the cash deposits as unexplained investment under section 69 of the Act. He also treated the cash withdrawals as unexplained expenditure under section 69C of the Act. Accordingly, the Assessing Officer added both the amounts to the total income of the assessee.

4.

Aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A) who confirmed the additions made by the Assessing Officer.

5.

Against the aforesaid order of the learned CIT(A), the assessee is in appeal before us.

6.

The learned Authorized Representative before us submitted that the authorities below have failed to appreciate the bank statements produced by the assessee. He drew our attention to the bank statement and submitted that substantial cash withdrawals were made from the bank before the impugned cash deposits. According to him, the subsequent cash deposits were made out of the same cash withdrawn earlier and there was a complete nexus between the withdrawals and the deposits.

6.1 The learned Authorized Representative further submitted that the Assessing Officer has not brought any evidence on record to show that

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ITA No.902/Bang/2026 Page 3 of 5 the cash withdrawn from the bank has been utilized for any other purpose. Therefore, there was no justification for treating the subsequent deposits as unexplained.

6.2 It was further argued that the addition made under section 69C of the Act in respect of cash withdrawals is wholly unsustainable. A withdrawal from one's own disclosed bank account cannot be treated as unexplained expenditure. The source of the withdrawals is evident from the bank account itself and has never been disputed by the Revenue. The learned Authorized Representative therefore prayed that both the additions be deleted.

6.3 The learned Departmental Representative, on the other hand, supported the orders of the Assessing Officer as well as the learned CIT(A). He submitted that the assessee had failed to satisfactorily explain the cash transactions before the lower authorities. According to him, the Assessing Officer was justified in making the additions and the learned CIT(A) rightly confirmed the same.

7.

We have carefully considered the rival submissions of both the parties and examined the materials available on record. The entire addition has been made by the AO considering the cash deposits and the cash withdrawals independently without examining the complete flow of funds in the bank account of the assessee. The bank statement placed before us shows that substantial cash was withdrawn from the same bank account before the subsequent cash deposits. The Revenue has not brought any material on record to establish that the cash withdrawn had

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ITA No.902/Bang/2026 Page 4 of 5

been spent elsewhere or was otherwise unavailable with the assessee at the time of making the deposits.

7.1 In our considered view, once the assessee explains that the cash deposits were made out of earlier cash withdrawals from the same bank account and such explanation is supported by the bank statement, the burden shifts upon the Revenue to disprove the explanation of the assessee. No such exercise has been undertaken by the Assessing Officer.

7.2 We also find that the addition made under section 69C of the Act in respect of cash withdrawals cannot be sustained. Withdrawal of money from one's own bank account does not amount to unexplained expenditure. Unless the Revenue establishes that the assessee incurred expenditure from an unexplained source, section 69C cannot be invoked merely because cash has been withdrawn from a disclosed bank account.

7.3 The Assessing Officer has, in effect, brought to tax both the withdrawals and the deposits without appreciating that they represent the movement of the same funds. Such an approach is legally unsustainable. In view of the above facts and circumstances, we hold that the additions made under sections 69 and 69C of the Act are not justified. Accordingly, we set aside the order of the learned CIT(A) and direct the Assessing Officer to delete the additions made by him. Hence, the ground of appeal of the assessee is allowed.

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ITA No.902/Bang/2026 Page 5 of 5

8.

In the result, the appeal of the assessee is allowed.

Order pronounced in court on 20th day of July, 2026

Sd/- Sd/- (SANDEEP SINGH KARHAIL) (WASEEM AHMED) Judicial Member Accountant Member Bangalore Dated, 20th July, 2026 / vms / Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore

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