RAJA KUMARI MUPPAVARAPU,GUNTUR vs. ITO, CIRCLE(INTL TXN), VISAKHAPATNAM

PER OMKARESHWAR CHIDARA, ACCOUNTANT MEMBER: In the above cited appeal, the appellant raised the following grounds of appeal, as she is mainly aggrieved by the addition made by the Ld. Assessing Officer [hereinafter in short “Ld.AO”] with respect to cash deposited into her Savings Bank Account (NRI Account) of ICICI Bank as unexplained money under section 69A of the Act. Assessee has raised the following grounds of appeal:

1) Whether in the facts and circumstances of the case the Hon’ble CIT(A) was justified in affirming opening an assessment under Sec 147 where there was no information available with the AO that the income has escaped assessment. 2) Whether in the facts and circumstances of the case the Hon’ble CIT(A) was justified in affirming an addition without considering the reply of the appellant or giving an opportunity to provide further information. 3) Whether in the facts and circumstances of the case the Hon’ble CIT(A) was justified in affirming an addition to the tune of Rs.68,00,000/- u/s 69A of the Income tax Act, 1961 4) Whether in the facts and circumstances of the case the Hon’ble CIT(A) was justified in affirming an addition to the tune of Rs. 4,05,086/- as income from other source. 5) Whether in the facts and circumstances of the case the Hon’ble CIT(A) was justified in affirming an order passed in breach of natural justice. 6) Whether in the facts and circumstances of the case the Hon’ble CIT(A) was justified in affirming interest chargeable under Sec 234A, 234B and 234C of the IT Act, 1961. 7) Whether in the facts and circumstances of the case the Hon’ble CIT(A) was justified in affirming penalty under Sec 270A(2) of the IT Act, 1961. 8) The appellant craves leave to add, alter, modify and withdraw any grounds before OR during the course of appellate proceedings.

a) The assessee is a non-filer i.e., did not file return of income even though she had got taxable income like rents, bank interest.

b) The assessee is a Non-Resident Indian (NRI) since long and settled in USA, her father passed away and mother is residing in India.

c) Since the assessee has taxable income and also huge cash deposits were made into her NRI Account of ICICI Bank, in India, the Income-tax Department has reason to believe that income escaped tax and accordingly notice under section 148 of the Act was issued after following the due process of law. In pursuance of this income escapement notice, the assessee filed a return of income admitting income of Rs.8.95 lakhs and paid taxes.

d) The Ld.AO has issued a notice under section 142(1) of the Act calling for the sources of cash deposits made into her bank during the year under consideration to the extent of Rs.68,00,000/- from 06.05.2015 to 24.02.2016. The appellant has stated that her mother has gold of more than 2 KGs and also, she recovered old loans given to farmers during earlier period. The gold was sold to her close relatives and they paid cash to her. The same cash was deposited into appellant’s NRI Account by her mother as she wanted to gift the same to her. As the appellant is not interested in taking gold to USA, she requested her mother to sell the gold and give cash and her mother did accordingly and passed away. In proof of the same, the appellant filed an affidavit allegedly signed by her mother during her life time before ITAT. Certain confirmation letters of persons alleged to whom the gold was sold, were also filed before ITAT during the hearing proceedings.

e) As the Ld.AO & Ld. CIT(A) were not convinced about the veracity and genuineness of appellant’s explanation, the same was disbelieved for the reasons mentioned in their orders and the addition made by Ld.AO was confirmed by the Ld. CIT(A).

f) Aggrieved by the order of the Ld. CIT(A), the appellant filed an appeal before ITAT with the grounds of appeal mentioned in the second page of this order.

SHORT SYNOPSIS ISSUE :- • Cash deposit of a sum of Rs. 68,00,000/- in ICICI Bank of the SUBMISSION:- 1. The appellant is an individual and a Non-Resident Indian (NRI). For the relevant year the appellant had not filed her original return of income. The case was selected for reassessment against which she filed her return of income on 25/03/2023 declaring total income of Rs. 8,95,860/-. 2. The Ld. AO made an addition of Rs. 68,00,000/- as unexplained cash deposits u/s 69A of the Act vide the impugned assessment order which was confirmed by the Ld. CIT(A). 3. It is submitted that the mother of the Appellant was an old aged lady and her daughters were NRI. Because of her old age she wanted to gift her gold and money to her daughters, out of love and affection. Accordingly, she gifted certain gold ornaments and receivables from farmers to the Appellant and her sister. Since the Appellant was permanently settled in the USA and was not interested in carrying the gold ornaments abroad, the Appellant's mother liquidated the gold ornaments and transferred the sale proceeds aggregating to Rs. 68,00,000/- in tranches to the Appellant on various dates. The said facts are duly evidenced by the notarized affidavit dated 25/02/2016 of the mother of the appellant is enclosed below. 4. Further, the mother of appellant died on 16/10/2017, which proves that she was anticipating uncertainty and hence gifted her belongings to her daughter. A copy of death certificate is enclosed below. 5. It is cardinal to mention here that the Appellant was not in India at the time when the substantial amounts were deposited in her bank account. Therefore, the Appellant had no role in the sale of the gold ornaments or in the deposit of cash arising therefrom. This fact is duly corroborated by the passport records showing the Appellant's stay in India and the bank statements reflecting the receipt deposits. Copy of passport records and bank statements are enclosed below. A detail of appellant stay vis-a vis cash deposit is provided below:- Sr.No. Arrival Departure 1. 23/Apr/2015 7/May/2015 2. 31/AUG/2015 3/Sep/2015 3. 28/JUN/2016 06/Aug/2016 4. 5/Oct/2016 14/Oct/2016 5. 20/Nov/2016 24/Dec/2016

Sr.No Bank Deposit Amount 1. 05/05/2015 900000 2. 07/05/2015 900000 3. 13/05/2015 800000 4. 19/05/2015 900000 5. 21/05/2015 700000 6. 19/02/2016 800000 7. 22/02/2016 900000 8. 24/02/2016 900000

6.. Further, to substantiate the claim of the Appellant, the appellant submits handwritten document duly signed and thumb impressed by purchaser of gold ornaments which includes description, date, weight, sale proceeds realized on sale etc. The said document evidences the availability of gold jewellery with the mother of the appellant and further supports the appellant's contention that the amount of Rs. 68,00,000/- received by the appellant was sourced by the sale proceeds of the gold belonging to her mother and thereafter gifted to the Appellant by her mother. A copy of the said document is enclosed below. 7. It is emphatically stated that the alleged basis of the addition appears to be that the mother of the appellant ought to have filed return of income and paid tax on capital gains arising from the sale of gold ornaments. It is submitted that without prejudice, even assuming that any capital gains arose on the sale of gold ornaments, such gains could be assessed only in the hands of the mother, being the owner and transferor of the asset. Consequently, any alleged liability relating to capital gains taxation cannot be shifted to the Appellant who merely received a gift from her mother. 8. In view of the above facts and circumstances, it is respectfully submitted that the addition made in respect of the amount of Rs. 68,00,000/- received as a gift from the Appellant's mother as unexplained cash deposits under section 69A is wholly unjustified and liable to be deleted.”

a) The notarized affidavit and confirmation letters allegedly signed by buyers of gold are only alibies created by appellant as after-thought and if the appellant has all these documents with her earlier, she would have filed all these documents before Ld.AO / Ld. CIT(A). So, the presumption is that they are prepared as alibies subsequent to the order of Ld.AO / Ld. CIT(A).

b) The Ld. DR has pointed certain inconsistencies in the notarized affidavit filed by Ld.AR of appellant stating that the Stamp Paper was purchased by a Chennai person for his personal purposes. The appellant has struck down the purpose of purchase of stamp paper where it was mentioned that it was purchased for the personal purposes of some other person which implies that an old stamp paper was obtained by appellant and entire story was mentioned in that affidavit. Hence, the same need not be taken into cognizance and not much evidentiary value can be given to this notarized affidavit because they are self-recitals.

c) The additional evidences of affidavits and confirmation letters filed before ITAT now should not be entertained as they were not filed by following the due procedure mentioned in Rule 29 of I.T. Rules.

d) As the mother of appellant already passed away, the contents of notarized affidavit cannot be examined / verified. It is also not known whether the signature in affidavit belongs to her mother or not.

e) The alleged letters of buyers of gold are also not contemporaneous and they were obtained by appellant after more than one year which is against the normal procedure.

f) The Ld.AR of the appellant could not explain why these documents were not filed before Ld.AO / Ld. CIT(A) and if they are available earlier, the same would have been filed before the authorities earlier. Hence, these notarized affidavit and confirmation letters are not reliable documents.

g) The Ld. DR has filed his written submissions also after arguing his case which is reproduced below:

“WRITTEN SUBMISSIONS OF BEHALF OF THE REVENUE Oral arguments are held in this case on 18.06.2026. The summary of arguments made by the Sr. Authorised Representative on behalf of the Revenue are being presented in this Written Brief: 1. Factual Background and Assessment Proceedings • The assessee is an individual and a Non-Resident Indian (NRI) who had not filed her original return of income. • Based on high-risk non-filer data, the Department observed that the assessee had deposited cash amounting to Rs. 68,00,000/- in her ICICI Bank account during the Financial Year 2015-16, prompting the initiation of re-opening proceedings u/s 148 in respect of AY 2016-17 relevant to FY 2015-16. • A notice u/s 142(1) was issued, and the assessee submitted a reply on 03-03-2024 along with a copy of her ICICI Bank statement for the relevant financial year. The statement reflected multiple cash deposits. Relevant portion of the scanned bank statement is as follows:

• The assessee attempted to explain the source of this deposit was cash received from her deceased mother, generated out of alleged sale of gold ornaments. • During the assessment, the assessee did not submit any documentary evidence, receipts regarding the buyers, or details on how much gold was sold, thereby failing to prove the genuineness and creditworthiness of the source. • Consequently, the Assessing Officer (AO) found the explanation unsatisfactory and made an addition u/s 69A, treating the cash as unexplained. • Aggrieved, the assessee filed an appeal before the CIT(A). The CIT(A) dismissed the appeal and upheld the AO's assessment, noting that no fresh evidence had been submitted

• B. Unreliable Confirmations and Improbable Financial Behavior: The assessee produced seven confirmations from alleged buyers, claiming her mother sold 2,050.60 gms of gold for a total of Rs 49,09,000/-. The gist of the confirmations produced is as follows:

• From perusal of these confirmations, it is observed that these confirmations were not contemporaneous documents. There confirmations were stated to be given much later the alleged transactions took place. The exact dates of payments made are not provided in these confirmations. Surprisingly, no cash receipts were made during alleged payments in multiple tranches. • Although these confirmations were allegedly available with the assessee / assessee's family way back in 2016, they were not produced the AO and CIT (A). This fact raises serious doubts about the contemporaneous nature of these confirmations and their genuineness. • The assessee claims her mother received this cash in multiple tranches and held onto it until handing it over when the assessee visited India. It is highly unlikely and irrational that such substantial cash would be held physically by aged mother of assessee for an extended period. Moreover, the cash was purposefully split into multiple deposits of less than Rs. 10 lakhs at the time of deposit into bank account on different dates in a short period. There is no rational sense or justification for splitting the cash deposits in this manner except for an attempt to evade reporting by the Bank to the Department. • C. Lack of Appraisal and Buyer Credentials: The confirmations submitted by the purchasers are entirely self-serving in nature. There is no mention of any gold appraisal being conducted, nor are there any particulars of a qualified appraiser. It is highly improbable for anyone to purchase such a huge quantum of gold without carrying out a proper appraisal. Furthermore, the identity, source of income, and financial competence of these alleged purchasers have not been established. • D. Absence of Source for Mother's Gold: The assessee claims her mother purchased the gold and silver ornaments in 2011, yet there is not an iota of evidence supporting the initial purchase of these assets. Nothing has been brought on record to establish how the mother acquired more than 2 kgs of gold. There is no evidence of wealth tax returns being filed by the mother, nor any disclosure made under the VDS scheme. These dubious sale documents are a clear after-thought meant solely to justify the unexplained bank deposits. • E. Limitation under CBDT Instructions: In the absence of evidence, the self-serving statement regarding the possession of 2 kgs of gold in the hands of assessee's mother is devoid of any merit and liable for summary rejection. Even if any benefit of doubt is applied regarding Stree Dhan under CBDT Instruction No. 1916, it has to be limited to 500 gms for a married woman. Given that the assessee admits her mother had already distributed a share of the ornaments to the assessee's sister, only half of this 500 gms threshold (i.e., 250 gms) could hypothetically be considered as a source of cash for the assessee. This falls vastly short of explaining the Rs. 68,00,000/- deposited. 3. Legal Precedent: The Test of Human Probabilities The Revenue relies on the landmark judgment of the Hon'ble Supreme Court in the case of Sumati Dayal vs. Commissioner of Income Tax, Bangalore (1995) 214 ITR 801 (SC). In this ruling, the Supreme Court laid down the crucial "test of human probabilities" when analyzing the genuineness of a transaction. The Court established that tax authorities are entitled to look behind the apparent form of a transaction to discover its true nature by evaluating the surrounding circumstances. The Court held that if an assessee's explanation regarding the source of a credited sum is contrary to ordinary human behavior and logic, the Department is justified in rejecting the claim as a facade for undisclosed income. Applying this precedent to the current case, the altered stamp papers, the sudden emergence of unverifiable buyer confirmations, the systematic splitting of cash deposits, and the lack of proof regarding the mother's capacity to acquire 2 kgs of gold all collectively fail the test of human probabilities. PRAYER Going through the detailed submissions and factual matrix presented above, it is evident that the contentions of the assessee are baseless and devoid of merit. Therefore, it is respectfully prayed that the assessee's versions be summarily rejected and the addition made by the Assessing Officer under Section 69A of the Act be confirmed.”

a) The appellant could not explain the reasons for not filing the alleged notarized affidavit of appellant’s mother and alleged confirmation letters by the buyers of gold before lower authorities and same raises serious doubts.

b) The circumstantial evidence of depositing the total amount in the bunches of below Rs.10,00,000/-, shows that the assessee does not want the bank to intimate these cash transactions to the Income Tax Department. The cash deposits above Rs.10,00,000/- would be intimated to RBI by all banks and then RBI flags the same to Income Tax Department.

c) The notarized affidavit alleged to have been signed by appellants mother filed by Ld.AR of appellant suffers from several inconsistences as mentioned by Ld.DR in his written submissions and Bench agrees with the arguments of Ld.DR in this regard as there is sufficient force in it. The notarized affidavit of Stamp Paper alleged to have been signed by appellant’s mother contains alterations as mentioned by Ld. DR in Para No. 2 of written submissions and the Bench also concurs with him. Affidavit without opportunity of verification by Ld.AO cannot be allowed for evidentiary purposes. In other words, the affidavit does not have any evidentiary value now because the person who is alleged to have been written, is no more in this world.

d) If the appellant’s mother who is an aged widow living in village, she would not be keeping such huge cash at home. If appellant’s mother is having such huge cash, she would have deposited entire cash into appellant’s bank account at once and there is no reason for depositing cash over a period of more than six months in the instalments with less than Rs.10,00,000/- each time.

e) The reliance placed by the Ld.AR of appellant on two cases are not applicable to this case as in those cases, appellant has provided credible evidences to substantiate the cash deposited into the Bank. In one case, the amounts were transferred from a foreign country through banking channels and the facts are distinguishable.

f) The Ld. DR has relied on the decision of Hon’ble Supreme Court in the case of Sumati Dayal v. CIT, Bangalore (1995) 214 ITR 801 (SC) in his written submissions and the same is correct for the present facts and circumstances and hence the addition is confirmed.

g) As per the CBDT’s circular, a married woman can have 500 Grams of gold and there should not be any enquiry into the same. Hence, the Ld.AO is directed to reduce the cost of 500 Grams of gold. Even though there is no evidence for the possession of 500gms of gold, benefit of doubt is granted to appellant in view of CBDT’s Circular.

h) There is no proof that appellant’s mother had gold of 2 KGs plus which the appellant claims that the same was sold. There is no proof of filing wealth tax return by appellant’s mother.

i) Generally, if there is gold with mother, she would equally divide the same to her siblings. The appellant has got a sister who is married which implies that appellant’s mother should have 4 KGs of gold and 2 KGs gold should have been given to her sister also, but there is no evidences of giving 2 KGs gold to another daughter by mother of appellant. If the appellant’s mother is having such huge quantity there is wealth tax liability, and since there is no wealth tax return by appellant’ mother, presumption is that her mother does not possess such huge quantity of gold and when there is no gold, there is no question of selling gold of such huge quantity to the villagers.

j) The appellant could not explain why the gold was not sold to any Authorised jewelers / shops where she can get sale proceeds by cheque with bills.

Whenever anyone buys gold, first this old gold would be melted and the quantity and purity would be tested and valued accordingly, whereas in this case it is seen old gold ornaments were claimed to have been sold, and no buyer buys such gold in that fashion.

k) There is no corroborative evidence to show that the buyers of gold (villagers) have that much cash with them.

There are no contemporaneous records to show that the gold was sold to these l) villagers because the alleged confirmation letters of gold buyers are dated at a much later date, as mentioned by Ld. DR in his “Written Submissions” Para 2(B).

m) The Ld. AR of appellant has filed seven (7) confirmation letters of alleged buyers of gold and the total cost mentioned is only Rs.49,09,000/- as mentioned in the “Written Submissions” of Ld. DR at Para No. 2(B), whereas the appellant claims her mother sold gold worth Rs.68,00,00/- and deposited the cash in her bank account also shows that the figures are not tallying and hence there is not much evidentiary value to these alleged confirmation letters of buyers of gold.

n) If only appellant’s mother sold the gold and received the cash the appellant’s mother would have filed Income Tax Return and admitted capital gains income on sale of gold. The Ld.AR of appellant has fairly admitted that no Income Tax Return was filed by appellant’s mother. The very fact that no capital gains tax was paid by appellant’s mother shows that there is neither sale of gold nor receipt of cash by appellant’s mother. Since there is no evidence of possession of such huge quantity of gold of 2KG/4KG, no corroborative/contemporaneous evidence of sale of gold, the contentions of appellant are not acceptable and the addition made by Ld.AO is upheld.

o) The assessee is an NRI, but her bank account in India is probably old Bank Account and not NRO Account, NRE Account. An NRI cannot maintain old regular savings accounts as per FEMA guidelines. In fact, no cash can be permitted to be deposited into NRI/NRE Account.

Order pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1962 by placing the details on the notice board on 10th July, 2026.

Sd/- Sd/- UDAYAN DAS GUPTA OMKARESHWAR CHIDARA JUDICIAL MEMBER ACCOUNTANT MEMBER Visakhapatnam Dated: 10th July, 2026 Giridhar, Sr.PS Copy to: RAJA KUMARI MUPPAVARAPU, 7 11 104 GANGADHARAVARI STREET 1 REPALLE, REPALLE GUNTUR, GUNTUR-522265, ANDHRA PRADESH

ITO, CIRCLE (INTL TXN), INCOME TAX OFFICE-INFINITY TOW, 2 VISAKHAPATNAM-530016, ANDHRA PRADESH

3 THE PCIT / CIT, 4 THE D.R., ITAT, VISAKHAPATNAM BENCH 5 GUARD FILE