GURUPADAYYA SWAMI,KALABURAGI vs. INCOME TAX OFFICER, WARD-1 & TPS, KALABURAGI

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ITA 2127/BANG/2025Status: DisposedITAT Bangalore06 July 2026AY 2021-2212 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the lower authorities had not examined the cash flow, withdrawals, and additional evidence regarding agricultural income in detail. Therefore, the matters were restored to the AO for fresh adjudication.

What were the facts?

The assessee appealed against additions made by the Assessing Officer (AO) and confirmed by the CIT(A) for cash deposits and claimed agricultural income. The AO treated these amounts as unexplained money under Section 69A due to lack of satisfactory explanation and documentary evidence.

What were the issues?

Whether the cash deposits and claimed agricultural income were sufficiently explained by the assessee, and if additional evidence regarding agricultural income and Section 80C deductions should be considered.

Which sections of the Income-tax Act were involved?

Section 69A,Section 10(1),Section 80C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, BANGALORE

Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY

For Appellant: Shri Veeresh Hiremath, CA
For Respondent: Shri N Balusamy, JCIT (DR)
Hearing: 16.06.2026Pronounced: 06.07.2026

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

ITA No. 2127-2128/Bang/2025 Assessment Year: 2021-22 & 2022-23 Gurupadayya Swami, Vs. The Income Tax Officer, H No.867/22ECI Mahaveer Nagar, Ward – 1 & TPS, Jewargi Road, Kalaburagi. Kalaburagi – 585 102. PAN – CTQPS 1976 N APPELLANT RESPONDENT Assessee by : Shri Veeresh Hiremath, CA Revenue by : Shri N Balusamy, JCIT (DR) Date of hearing : 16.06.2026 Date of Pronouncement : 06.07.2026 O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:

The present appeals have been filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals) [CIT(A)] confirming the additions made by the Assessing Officer (AO) under section 69A of the Income-tax Act, 1961.

2.

The interconnected issues raised by the assessee are (i) addition of ₹18,65,000 on account of cash deposits in the bank account and (ii) addition of ₹21,45,900 representing agricultural income claimed as exempt under section 10(1) of the Act.

ITA No.2127 & 2128/Bang/2025 Page 2 of 12 3. During the course of assessment proceedings, the AO noticed cash deposits amounting to ₹18,65,000 in the bank account of the assessee. The assessee was asked to explain the source of such deposits. According to the AO, the assessee failed to furnish satisfactory explanation regarding the source of cash deposits. Accordingly, the AO treated the amount of ₹18,65,000 as unexplained money under section 69A of the Act and added the same to the total income of the assessee.

3.1 Likewise, the assessee disclosed agricultural income of ₹21,45,900 and claimed the same as exempt under section 10(1) of the Act. During the assessment proceedings, the AO asked the assessee to substantiate the agricultural income with documentary evidence. Since, according to the AO, the assessee failed to establish the genuineness of the agricultural income and did not furnish sufficient evidence, the AO treated the amount of ₹21,45,900 as unexplained money under section 69A of the Act and added the same to the total income.

3.2 The assessee challenged both the additions before the learned CIT(A). However, the learned CIT(A) confirmed the action of the AO by observing that the assessee failed to establish the source of cash deposits with supporting evidence. The ld. CIT(A) held that mere explanation without proper documentary evidence cannot be accepted and therefore upheld the addition made by the AO. The relevant extract of the order of ld. CIT-A is reproduced as under: “6.3.6. Thus, as per the above section the onus is on the appellant who is found to be in possession of money in his saving bank account which is not recorded in his books of accounts and has not offered any explanation to the assessing officer, then such an income of the appellant would be taxed u/s. 69A of the Income Tax Act. In the present case, the onus has not been discharged by the appellant as

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ITA No.2127 & 2128/Bang/2025 Page 3 of 12 cast on him by Section 69A of Income Tax Act and hence, the Ld. AO has rightly added an amount of Rs. 18,65,500/- to the income of the appellant. 6.3.7. As per the Decision of Hon'ble Supreme Court hn K. Chinnathamban Vs. CIT, Salem (2007) 162 Taxman 459/ 292 ITR 682, the Hon'ble Court has clearly said that Burden of Proof - The onus of proving the source of deposit primarily rests on the person in whose name the deposit appears in the various Banks. Thus, it is clear that as the appellant could not discharge the primary onus cast on her with regard to proving the nature and source of the cash deposited in his Saving Bank Account, hence, I have no doubt in my mind that the Ld. AO had rightly taxed the same in the hands of the appellant. 6.3.8. In view of the detailed discussion of facts and circumstances of the case, I am of the firm view that the order passed by the AO is as per the procedure laid down in the Income Tax Act and as per the various provisions of the Income Tax Act. In view of the above, the ground of appellant is dismissed and the addition made by the AO is hereby confirmed.”

3.3 Similarly, the assessee challenged the addition for the agricultural income before the learned CIT(A) who confirmed the addition made by the AO by observing that the assessee failed to prove the agricultural activity, ownership of agricultural land, and receipt of agricultural income with supporting evidence. Accordingly, the addition made by the AO was upheld. The relevant extract of the order of ld. CIT-A is reproduced as under:

“6.2.4. Considering the facts of the case, it is seen that Rs.21,45,900/- allegedly received from HUF is a huge amount without HUF deed, bank statement HUF, or evidence of transfer of the amount was provided. No document was filed to prove that this money belonae otJFahaThas received as distribution. Moreover, deposits of identical amount could not be found out in the bank accounts of the assessee Hence, the entire amount added as unexplained income u/s. 69A is hereby confirmed.”

4.

Being aggrieved by the order of ld. CIT-A, the assessee is in appeal before us.

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ITA No.2127 & 2128/Bang/2025 Page 4 of 12

5.

The learned AR before us filed a paper book running from pages 1 to 75 and submitted that the assessee had made sufficient cash withdrawals from the bank account before the impugned deposits. It was contended that the total cash withdrawals were more than the cash deposits and, therefore, the source of deposits stood explained.

5.1 The learned AR further submitted that the assessee had received agricultural income in cash, which was subsequently deposited into the bank account. Therefore, making a separate addition of cash deposits would result in double addition of the same source of cash deposits.

6.

Per contra, the learned DR submitted that the documents relied upon by the assessee regarding cash withdrawals were not examined by the lower authorities. Therefore, the matter requires verification by the AO. The learned DR supported the order of the ld. CIT(A) and alternatively prayed that the issue may be restored to the file of the AO for fresh consideration as per the provisions of law.

7.

Regarding the addition of agricultural income of ₹21,45,900, the learned AR submitted that the HUF was having agricultural land and had earned agricultural income from such land. In support of the claim, the ld. AR referred to the documents placed in the paper book, including RTC/Pahani records, land ownership documents, and APMC market receipts, placed on pages 9 to 24 of the PB. The learned AR submitted that these documents establish the ownership of agricultural land and the earning of agricultural income. Therefore, the addition made under section 69A of the Act was not justified.

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ITA No.2127 & 2128/Bang/2025 Page 5 of 12

8.

Per contra, the learned DR submitted that the evidence/ documents relied upon by the assessee were filed for the first time before the Tribunal and were not available before the AO or ld. CIT(A). Accordingly, the learned DR submitted that the issue may be restored to the file of the AO for fresh examination of the additional evidence/ documents.

9.

We have considered the rival submissions and perused the materials available on record. The assessee has claimed that the cash deposits were made out of earlier cash withdrawals from the bank account. The assessee has also contended that agricultural income received in cash was deposited into the bank account. However, we note that the explanation regarding availability of cash and the cash flow statement has not been examined in detail by the lower authorities. Since the verification of bank withdrawals and deposits is necessary for deciding the issue, we deem it appropriate to restore the matter to the file of the AO. Accordingly, the issue relating to addition of ₹18,65,000 is set aside to the file of the AO for fresh adjudication as per law. The AO shall verify the cash withdrawals, cash deposits, availability of cash balance, and decide the issue in accordance with law after providing reasonable opportunity of hearing to the assessee.

9.1 Regarding the agricultural income, we have considered the submissions of both parties. It is noticed that the assessee has filed additional evidence in the form of RTC/Pahani records, land ownership documents, and APMC receipts to substantiate the agricultural income. However, these documents were not examined by the lower authorities. Since these evidences are relevant for deciding the genuineness of

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ITA No.2127 & 2128/Bang/2025 Page 6 of 12 agricultural income, we find it appropriate to restore the matter to the file of the AO. The AO shall examine the documentary evidences filed by the assessee, verify the agricultural land holding, agricultural activities, receipts, and decide the allowability of exemption claimed under section 10(1) of the Act. The AO shall also consider the assessee's contention regarding double addition, if the agricultural income has already formed the source of cash deposits. The assessee shall be provided reasonable opportunity of being heard. In view of the above discussion, both the issues are restored to the file of the Assessing Officer for fresh adjudication in accordance with law. Hence, the grounds of appeal of the assessee are hereby allowed for statistical purposes.

9.2 The assessee before us vide application dated 2 June 2026 has filed an additional ground of appeal stating that the learned CIT(A) erred in setting aside the issue relating to the addition made by the AO of ₹52,18,998 for statistical purposes instead of deciding the same on the merits of the case.

10.

We have considered the application filed by the assessee for admission of the additional ground of appeal. The assessee has challenged the action of the learned CIT(A) in restoring the issue relating to the addition made by the AO instead of adjudicating the same on merits. After considering the submissions of both the parties, we find that the additional ground raised by the assessee is legal in nature and goes to the root of the matter. The adjudication of the said ground does not require any fresh investigation of facts, as the relevant facts are already available on record. Further, the Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. vs. CIT reported in 229 ITR 383 has held that a legal ground can

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ITA No.2127 & 2128/Bang/2025 Page 7 of 12 be admitted at the appellate stage if it is necessary for the purpose of correctly determining the tax liability of the assessee. Accordingly, considering the facts and circumstances of the case, we admit the additional ground of appeal raised by the assessee and proceed to adjudicate the same on merits.

10.1 In addition to the bank deposits in cash, there were other credits in the bank accounts of the assessee amounting to ₹52,18,998, the source of which was not explained by the assessee. Accordingly, the AO treated such credits in the bank accounts of the assessee as unexplained income under section 69A of the Act and added the same to the total income of the assessee.

11.

Aggrieved, the assessee preferred an appeal before the learned CIT(A), who allowed the ground of appeal of the assessee for statistical purposes by observing as under: “6.2.4. Considering the facts of the case, it is seen that Rs.21,45,900/- allegedly received from HUF is a huge amount without HUF deed, bank statements#. HUF, or evidence ‘of transfer of the amount was provided. No document was filed to prove that this money belonged to HUF was received as distribution. Moreover, deposits of identical amount could not be found out in the bank accounts of the assessee Hence, the entire amount added as unexplained income u/s. 69A is hereby confirmed.”

12.

Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us.

13.

The learned AR before us submitted that all the necessary details against the addition made by the AO of ₹52,18,998 were filed before the learned CIT(A), which were duly acknowledged. Therefore, the learned

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ITA No.2127 & 2128/Bang/2025 Page 8 of 12 CIT(A), instead of setting aside the issue to the file of the AO, should have decided the issue on merits.

14.

On the other hand, the learned DR submitted that there is no infirmity in the finding of the learned CIT(A), as the details furnished by the assessee were in the nature of additional evidence and, therefore, the same were required to be verified at the level of the AO.

15.

We have heard the rival contentions of both the parties and perused the materials available on record. Indeed, the assessee had not filed any supporting documents during the assessment proceedings justifying the credits in the bank amounting to ₹52,18,998. The necessary documents were filed by the assessee for the first time before the learned CIT(A). We do not find any infirmity in the order of the learned CIT(A). However, for the sake of repetition, we direct the AO to look into the additional documents filed by the assessee and adjudicate the issue afresh as per the provisions of law. Hence, the additional ground of appeal of the assessee is partly allowed for statistical purposes.

Admission and Disposal of Additional Ground relating to deduction under section 80C of the Act.

16.

We have considered the application filed by the assessee for admission of the additional grounds of appeal relating to the claim of deduction under section 80C of the Income-tax Act, 1961 amounting to ₹1,50,000.00 only.

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ITA No.2127 & 2128/Bang/2025 Page 9 of 12 16.1 After considering the submissions of both the parties, we find that the additional ground raised by the assessee is legal in nature and goes to the root of the matter. The adjudication of the said ground does not require any fresh investigation of facts, as the claim relates to deduction allowable under the provisions of the Act. Accordingly, in the interest of justice, we admit the additional ground of appeal raised by the assessee. Since the claim of deduction under section 80C of the Act amounting to ₹1,50,000 has not been examined by the lower authorities, we deem it appropriate to restore the issue to the file of the Assessing Officer for fresh adjudication. The AO is directed to examine the claim of the assessee, verify the supporting documents/evidences in respect of the investment eligible for deduction under section 80C of the Act, and decide the issue in accordance with law after providing reasonable opportunity of being heard to the assessee. Accordingly, the additional ground raised by the assessee is allowed for statistical purposes.

17.

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

Coming to ITA No.2128/Bang/2025 for the AY 2021-22

18.

The interconnected issue raised by the assessee is against the confirmation of additions made by the Assessing Officer (AO) on account of cash deposits and agricultural income shown by treating the same as unexplained money under section 69A of the Income-tax Act, 1961.

19.

We have heard the rival submissions and perused the materials available on record. The facts and circumstances of the present case are

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ITA No.2127 & 2128/Bang/2025 Page 10 of 12 similar to the facts involved in ITA No. 2127/Bang/2025, wherein the issue relating to cash deposits and agricultural income was restored to the file of the AO for fresh adjudication. Since the issues involved in the present appeal are identical, except for the variation in the amounts involved, and following the reasoning given in ITA No. 2127/Bang/2025, we deem it appropriate to restore the issue to the file of the AO for fresh adjudication. The AO is directed to examine the relevant details, evidences and explanations furnished by the assessee and decide the issue afresh in accordance with law after providing reasonable opportunity of being heard to the assessee. Accordingly, the issue relating to cash deposits and agricultural income is set aside to the file of the AO for fresh adjudication. Hence, the ground raised by the assessee is allowed for statistical purposes.

Issue relating to maturity of fixed deposit amounting to ₹16,88,364 (Ground Nos. 10 to 15)

20.

The issue raised by the assessee in Ground Nos. 10 to 15 relates to the addition of ₹16,88,364 on account of maturity of fixed deposit, which was treated by the lower authorities as unexplained money under section 69A of the Income-tax Act, 1961, for want of supporting documentary evidence.

21.

We have heard the rival submissions and perused the materials available on record. The facts of the case are that during the course of assessment proceedings, the AO noticed receipt of ₹16,88,364 on maturity of fixed deposit. Since the assessee failed to furnish necessary documentary evidence explaining the source of such amount, the AO

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ITA No.2127 & 2128/Bang/2025 Page 11 of 12 treated the same as unexplained money under section 69A of the Act and made an addition to the total income of the assessee. The learned CIT(A) confirmed the addition made by the AO. 21.1 Before us, the learned AR submitted that the fixed deposit was not made during the year under consideration but was created in the earlier year and had only matured during the year under consideration. In support of the contention, the learned AR drew our attention to the evidence placed at page 10 of the paper book demonstrating the details of the fixed deposit. The learned AR submitted that the same requires verification by the AO as per law and therefore requested that the matter may be restored to the file of the AO.

21.2 The learned DR did not seriously object to restoring the issue to the file of the AO for verification as per law.

21.3 We have considered the rival submissions and perused the materials available on record. It is noticed that the assessee has furnished evidence before us suggesting that the fixed deposit was made in an earlier year and the amount received during the year represents only the maturity proceeds of such fixed deposit. However, the said evidence requires verification at the assessment stage. Accordingly, in the interest of justice, we deem it appropriate to restore this issue to the file of the AO for fresh adjudication as per law. The AO is directed to examine the evidence furnished by the assessee, verify the date of creation of the fixed deposit, and decide the issue in accordance with law after providing reasonable opportunity of being heard to the assessee. Accordingly, the issue relating to maturity of fixed deposit amounting to ₹16,88,364 is set

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ITA No.2127 & 2128/Bang/2025 Page 12 of 12 aside to the file of the AO for fresh adjudication. Hence, the grounds raised by the assessee are allowed for statistical purposes.

22.

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

23.

In the combined results, both the appeals of the assessee are allowed for statistical purposes.

Order pronounced in court on 6th day of July, 2026

Sd/- Sd/- (KESHAV DUBEY) (WASEEM AHMED) Judicial Member Accountant Member Bangalore Dated, 6th 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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