RENGASAMY SALAISUNDARAM,TRICHY vs. ITO WARD 2(1), TRICHY

आयकर अपीलीय अिधकरण, ’सी’ �ायपीठ, चे�ई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI �ी इंटूरी रामाराव, लेखा सद� एवं �ी एस.एस. िव"ने$ रिव, �ाियक सद� के सम% । BEFORE SHRI. INTURI RAMA RAO, ACCOUNTANT MEMBER AND BEFORE SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं./I.T.A. No. 269/Chny/2026 िनधा'रण वष'/Assessment Year: 2015-16 Rengasamy Salaisundaram, Vs. Income Tax Officer, 2/40, Udayar Street, Ward -1, Sirumayanagudi Lalgudi, Thiruvannamalai. Trichy District – 621706. [PAN: BSVPS-1282-G] (अपीलाथ*/Appellant) (+,थ*/Respondent) अपीलाथ* की ओर से / Appellant by : Mr. K. Meenakshi Sundaram, ITP +,थ* की ओर से/Respondent by : Ms. Anitha, Addl.CIT सुनवाई की तारीख/ Date of hearing : 06.05.2026 घोषणा की तारीख /Date of Pronouncement 14.07.2026 : आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:

This appeal filed by the assessee is directed against the order dated 17.12.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2015-16.

2 ITA No. 269/Chny/2026

return of income filed. The AO issued notice u/s. 148 of the Income-tax

Act, 1961 (herein after “the Act”) with reference to cash deposits on

receipt of information reflected in NMS cases formulated by the CBDT.

The AO asked the assessee to explain the source of cash deposits made

during the year alongwith documentary evidences. According to the AO,

no explanation was offered, but however, furnished details for the source

for cash deposits in response to show cause notice, which are

reproduced in page no.3 of the assessment order. The AO did not

satisfy with explanation offered by the assessee and added an amount

of Rs.1,25,000/- on account of Smt. Adhilakshmi, Rs.3,00,000/- on

account of Smt. S. Prabavathi Rs.3,60,000/- on account of loan from

Shri. Kuppusamy vide its order dated 29.03.2024 passed u/s. 147 r.w.s.

144 of the Act. Having aggrieved by the order of the AO, the assessee

preferred an appeal before the ld.CIT(A). The ld.CIT(A) dismissed the

appeal of the assessee by holding that the genuineness of the

transaction is not established based on overall circumstances and facts

of the case. As aggrieved assessee is before us.

3 ITA No. 269/Chny/2026

passed by the ld.CIT(A)/NFAC, Delhi is objected that the

ld.CIT(A)/NFAC, Delhi erred in disbelieving the affidavits filed by the

three creditors. The ld.CIT(A)/NFAC, Delhi ought to have appreciated

the fact that the three individuals who had made the three transaction

into question were all persons with their own sources of income and all

the three transactions had passed the three tests of establishing the

identities of the donors and the creditors, genuineness of transactions,

creditworthiness of the donors and creditor. Further, he vehemently

argued that the ld.CIT(A)/NFAC, Delhi ought to have appreciated the

fact that the AO had not examined the donors and the creditor on oath,

had not proved the duplicity of the contents stated in the affidavits, had

not caused local enquiries through the inspector regarding the

genuineness of the sources of the creditors and the donors. The AO

ipse dixits without corroborative evidences have all vitiated her decision

that the gifts and the loan were all unbelievable in nature. Further, he

submits that the ld.CIT(A)/NFAC, Delhi ought to have appreciated the

fact that in all the three cases the statement of the donors and creditor

had been accepted in part and denounced in some respects. He argued

vehemently the view of the AO in this way of running with the hare and

4 ITA No. 269/Chny/2026

hunting with the hound exposes the weakness in the findings of the AO

and tilts the issues in favour of the assessee only. He submits that when

the assessee had not stopped with the statements alone but had

produced many documentary evidences regarding the possession of

lands, drawings from banks, jewel loan details and other procurable

evidences existing in the hands of the donors and the creditor, the

addition which was confirmed by the ld.CIT(A) made on surmises

deserves no support from the Tribunal and prayed to allow the appeal of

the assessee.

assessment order and submits that the AO found discrepancies in the

affidavit and rightly held the gifts from relatives and loan from the friends

as unexplained income. She referred the order of the ld.CIT(A) and

argued that the ld.CIT(A) considered other submissions of the assessee

and found not acceptable by holding the genuineness of transaction was

not established. She prayed to dismiss the grounds of appeal raised by

the assessee.

5 ITA No. 269/Chny/2026

We note that the assessee offered her explanation in response to the

show cause notice, the details of which are reproduced by the AO in

assessment order. On perusal of the same, we note that the AO

considered the sworn statement of Smt. Adilakshmi, who is wife of

brother of assessee, wherein he found satisfied with the explanation

offered to an extent of Rs.7,00,000/- and held remaining amount of

Rs.1,25,000/- (Rs.8,25,000 - Rs.7,00,000) remained as unexplained.

We note that the AO did not examine the said Smt. Adilakshmi regarding

the remaining amount of Rs.1,25,000/-, but however confirmed the said

amount as remained unexplained without bringing on record any

evidence showing that it is the unexplained income of the assessee. We

find no reference of discrepancy whatsoever recorded by the AO.

Further, in the case of Smt. Prabavathy, as it was stated that she had

give Rs.8,00,000/- by pledging her jewels and Rs.3,00,000/- by pledging

her documents and Rs.2,00,000/- as cattle loan. The AO, without

recording any reasons with reference to pledging of jewels, loan and

cattle loan proceeded to hold Rs.3,00,000/- on account of cash

withdrawals from IOB, Kothur as unexplained, in our opinion, is not

justified in confirming the addition in the hands of the assessee in the

6 ITA No. 269/Chny/2026

absence of any evidence in respect of statement of Smt, Prabavathy.

Further, having no confirmation letter from the creditor Shri. Kuppusamy,

the AO held that the assessee has not discharged his onus of proving

the same. On an examination of the findings of the AO, we find no

evidence brought on record by the AO showing that it is unexplained

income of the assessee except making allegation that the assessee

failed to discharge his onus. On reading of the impugned order, we note

that the assessee annexed confirmation from the loan creditor, but

however, the ld.CIT(A) held the same as aftermath without examining

the same on oath of such persons, in our opinion, is not justified. As

rightly pointed by the ld.AR, that the additions made on account of said

donors and creditor based on surmises requires interference from this

Tribunal. Having considered the submissions of the ld.AR with reference

to the circumstances and facts of the case and evidences brought on

record in respect of sworn affidavit by Smt. Adilakshmi, Smt. Prabavathy

and confirmation of creditor Shri. Kuppusamy, we are of the considered

opinion that the addition made by the AO which was confirmed by the

ld.CIT(A) is not maintainable and are deleted. Thus, order of the

ld.CIT(A) is set aside and grounds raised by the assessee are allowed.

7 ITA No. 269/Chny/2026

Sd/- Sd/- (INTURI RAMA RAO) (S.S. VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Chennai, Dated: 14.07.2026 JPV आदेश की +ितिलिप अ3ेिषत/Copy to: 1. अपीलाथ*/Appellant, 2.+,थ*/ Respondent, 3. आयकर आयु4/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय +ितिनिध/DR & 5. गाड' फाईल/GF.

Digitally signed by PRASANNA PRASANNA VANI JETTY VANI JETTY Date: 2026.07.16 14:02:44 +05'30'