ASHWINI CHAITANYA DONEPUDI,HYDERABAD vs. ITO, WARD-8(1), HYDERABAD

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘SMC‘ Bench, Hyderabad �ी रिवश सूद,�ाियक सद� एवं �ी मधुसूदन साविड़या लेखा सद� सम� | Before Shri Ravish Sood, Judicial Member A N D Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA No. 992/Hyd/2026 (िनधा�रण वष�/Assessment Year: 2017-18) Shri Ashwini Chaitanya Vs. ITO Donepudi, HYDERABAD Ward 8(1) PAN: BGHPD4809A Hyderabad (Appellant) (Respondent) िनधा�रती �ारा/Assessee by: CA S. Venkateshwarlu राज� व �ारा/Revenue by: Shri Laxmi Kanth, Sr. AR सुनवाई की तारीख/Date of hearing: 01/07/2026 घोषणा की तारीख/Pronouncement: 08/07/2026 आदेश/ORDER Per Madhusudan Sawdia, A.M.:

This appeal is filed by Shri Ashwini Chaitanya Donepudi (“the assessee”), feeling aggrieved by the order passed by the Learned ADDL/JCIT(A), Udaipur (Ld. First Appellate Authority”) dated 07.01.2026 for the A.Y. 2017-18. 2. The assessee has raised the following grounds of appeal: “1. The order of the Ld. CIT(A) is bad in both law and on facts of the case. 2. The Ld. CIT(A) erred in upholding the addition of Rs 12,96,560/- as unexplained money u/s 69A of the Act without appreciating that sec 694 is not applicable to the

2 facts of the case of the appellant despite explaining the sources for the cash deposits. 3. The Ld. CIT(A) failed to appreciate the findings of the AO particularly in the second remand report dated 03.11.2025 in proper perspective. 4. The Ld. CIT(A) erred in holding that provisions of S.115BBE of the Act are applicable for calculating tax rates without considering the fact that there is no case for invoking provisions of S.115BBE of the Act with regard to the addition in dispute and also for the impugned Assessment Year. 5. The appellant craves leave to add, alter or amend the above grounds of appeal before or in course of hearing.” 3. The brief facts of the case are that the assessee is an individual who filed his return of income for Assessment Year 2017-18 on 07.09.2017 declaring total income of ₹3,74,910/-. The case of the assessee was selected for limited scrutiny through CASS and accordingly notice under section 143(2) of the Income-tax Act, 1961 (“the Act”) dated 14.08.2018 was issued by the Learned Assessing Officer (“Ld. AO”). During the assessment proceedings, the Ld. AO observed that the assessee had deposited cash amounting to ₹12,96,560/- in his bank account during the year under consideration. The Ld. AO called upon the assessee to explain the source of such cash deposits. Being not satisfied with the explanation furnished by the assessee, the Ld. AO treated the entire cash deposit of ₹12,96,560/- as unexplained money under section 69A of the Act in the hands of the assessee. Accordingly, the assessment was completed by the Ld. AO under section 143(3) of the Act vide order dated 05.12.2019 by making an addition of ₹12,96,560/- under section 69A of the Act and assessing the total income of the assessee at ₹16,68,470/-.

3 4. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. First Appellate Authority. During the appellate proceedings, the Ld. First Appellate Authority called for a remand report from the Ld. AO. After considering the remand report and other material available on record, the Ld. First Appellate Authority dismissed the appeal of the assessee and confirmed the addition made by the Ld. AO. 5. Aggrieved by the order of the Ld. First Appellate Authority, the assessee is in appeal before the Tribunal. The Learned Authorized Representative (“Ld. AR”) submitted that the only issue arising out of the grounds of appeal of the assessee is the addition of ₹12,96,560/- made under section 69A of the Act. The Ld. AR further submitted that during the appellate proceedings before the Ld. First Appellate Authority, the issue was remanded to the file of the Ld. AO and the Ld. AO furnished a remand report dated 03.11.2025. Inviting our attention to para no. 6 of the remand report, placed at page no. 95 of the paper book, the Ld. AR submitted that the Ld. AO categorically stated that the information furnished by the assessee in support of the source of cash deposits amounting to ₹12,96,560/- in the bank account was verified and found to be in order. The Ld. AR also submitted that once the Ld. AO himself, after verification of the documents and explanations furnished by the assessee, accepted the source of cash deposits in the remand proceedings, there remained no basis for sustaining the addition. It was further submitted that the Ld. First Appellate Authority, without pointing out any defect in the remand report or any deficiency in the evidences produced by the assessee, rejected the findings of the Ld. AO and confirmed

4 the addition. Accordingly, the Ld. AR prayed that the addition sustained by the Ld. First Appellate Authority be deleted. 6. Per contra, the Learned Departmental Representative (“Ld. DR”) submitted that the Ld. First Appellate Authority is not bound by the findings recorded by the Ld. AO in the remand report and is empowered to take an independent view of the matter. Inviting our attention to para no. 5.3.6 of the order of the Ld. First Appellate Authority, the Ld. DR submitted that the assessee had changed his version regarding the source of cash deposits during the appellate proceedings as compared to the explanation furnished before the Ld. AO during the assessment proceedings. It was submitted that the Ld. First Appellate Authority rightly observed that the findings contained in the remand report were based upon explanations and supporting documents produced belatedly by the assessee during the appellate proceedings. Therefore, the Ld. First Appellate Authority was justified in not accepting the remand report and sustaining the addition. Accordingly, the Ld. DR supported the order of the Ld. First Appellate Authority and prayed before the Bench to uphold the order of the Ld. First Appellate Authority. 7. We have heard the rival submissions and perused the material available on record. The solitary issue for our consideration is, whether the addition of ₹12,96,560/- made under section 69A of the Act on account of cash deposits in the bank account of the assessee can be sustained. We have gone through para no. 6 of the remand report dated 03.11.2025 submitted by the Ld. AO, placed at page no. 95 of the paper book, which is to the following effect:

5 “6. The information furnished by the assessee in support of sources for the cash deposits made to the tune of Rs.12,96,560/- in his bank account was verified and found to be in order”. 8. On perusal of the above, we find that the Ld. AO has categorically recorded a finding that the information furnished by the assessee in support of the source of cash deposits amounting to ₹12,96,560/- in his bank account was verified and found to be in order. Thus, after examining the explanation and supporting evidences furnished by the assessee during the remand proceedings, the Ld. AO himself was satisfied regarding the source of the impugned cash deposits. We have also gone through para no. 5.3.6 of the order of the Ld. First Appellate Authority, which is to the following effect:

6 upon verification of the explanations and supporting evidences furnished by the assessee, recorded a categorical finding that the source of cash deposits stood explained and the evidences were found to be in order, then such findings could not have been brushed aside merely on the ground that the documents were produced during the appellate proceedings. If the Ld. First Appellate Authority intended to reject the remand report, it was incumbent upon him to point out specific deficiencies either in the remand report itself or in the evidences verified by the Ld. AO. However, no such defect, inconsistency or infirmity has been brought on record by the Ld. First Appellate Authority. The Ld. First Appellate Authority merely proceeds on the premise that the evidences were produced belatedly. In our view, the mere fact that the evidences were furnished during the appellate proceedings cannot be a valid ground to reject the remand report, particularly when the same were forwarded to the Ld. AO for verification and the Ld. AO, after due verification, found the explanation of the assessee to be satisfactory. Once the competent authority entrusted with verification of the evidences has accepted the explanation furnished by the assessee and no material has been brought on record to demonstrate that such findings are erroneous, incorrect or contrary to facts, there remains no justification for sustaining the addition. Accordingly, considering the categorical findings recorded by the Ld. AO in the remand report and in the absence of any defect pointed out either in the evidences furnished by the assessee or in the remand report itself, we hold that the addition of ₹12,96,560/- made under section 69A of the Act is unsustainable. We, therefore, direct the Ld. AO to delete the addition of ₹12,96,560/-.

Order pronounced in the Open Court on 8th July, 2026. Sd/- Sd/- (RAVISH SOOD) (MADHUSUDAN SAWDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, dated 8th July, 2026. Vinodan/sps Copy to: S.No Addresses 1 Shri Ashwini Chaitanya Donepudi, Flat No.3B, G2 Block, Srila Park Pride, Hydernagar, Hyderabad 500049 2 Income Tax Officer Ward 8(1) Signature Towers, Sy.No.6(P) of Kondapur, Sy.37(P) of Kothaguda, Opp: Botanical Gardens, Hyderabad 500084 3 Pr. CIT , Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File

By Order Digitally signed by TUMMALACHARLA TUMMALACHARLA LAKSHMI NARAYANA DN: cn=TUMMALACHARLA LAKSHMI LAKSHMI NARAYANA, c=IN, o=INCOME TAX APPELLATE TRIBUNAL, ou=INCOME TAX NARAYANA APPELLATE TRIBUNAL, CHENNAI BENCH Date: 2026.07.08 16:57:16 +05'30'