SILIVERU VANI GOPAL,NANDYAL vs. ITO, WARD-1, NANDYAL, NANDYAL

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ITA 1771/HYD/2025Status: DisposedITAT Hyderabad03 July 2026AY 2021-2210 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee had indeed filed a reply and substantial documentary evidence, which the CIT(A) failed to consider. Therefore, the CIT(A)'s order was set aside.

What were the facts?

The assessee's appeal concerns additions made by the Assessing Officer for cash deposits and disallowance of cost of improvement. The CIT(A) confirmed these actions, stating the assessee failed to provide sufficient documentary evidence.

What were the issues?

Whether the CIT(A) erred by not considering the documentary evidence submitted by the assessee, despite the assessee claiming to have provided it. The issue also involves the substantiation of cash deposits and cost of improvement.

Which sections of the Income-tax Act were involved?

Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD

Before: SHRI VIJAY PAL RAO & SHRI MANJUNATHA G

Pronounced: 03.07.2026

आदेश / ORDER

PER VIJAY PAL RAO, VICE PRESIDENT:

This appeal by the assessee is directed against he Order dated 25.08.2025 of the learned CIT(A)-National Faceless Appeal Centre [in short "NFAC"], Delhi, for the assessment year 2021-2022.

2.

The assessee has raised the following grounds of appeal:

1.

“The order of the Learned Commissioner of Income Tax (A) is not correct either on facts or in law and in both.

2.

a) The Ld First Appellate Authority is not justified in conforming the addition of Rs.55,47,000/- made u/s 69A by the Assessing Officer.

b) The Ld First Appellate Authority is not justified in not appreciating the claim of the appellant that the sources for the cash deposit in bank account are recoveries from debtors, receipts for advances for works contract and gifts from close relatives,

3 ITA.No.1771/Hyd./2025 supported by documentary evidences filed before First Appellate Authority.

3.

a) The Ld. First Appellate Authority is not justified in conforming the disallowance of Rs.20,14,600/- being the claim of cost of improvement of flat sold.

b) The Ld. First Appellate Authority failed to appreciate the claim that the cost of improvement of flats sold is appellant's share of investment is getting the flat constructed by the builder, evidenced by the payments made through banking channels.

4.

The appellant craves leave to add, amend, modify, rescind, supplement or alter any or more grounds of appeal stated herein above either before or at the time of hearing of this appeal.”

3.

The learned Authorised Representative of the Assessee has submitted that the Assessing Officer has made the addition of Rs.55.47 lakhs u/sec.69A of the Income Tax Act [in short "the Act"], 1961 on account of cash deposit in the bank account of the assessee. The assessee challenged the action of the Assessing Officer before the learned CIT(A) and also filed reply as well as supporting evidence. Further, the Assessing Officer has also disallowed the claim of cost of improvement of the flat sold by the assessee during the year despite the filed the supporting evidence. He has referred to the impugned order of the learned CIT(A) and submitted that

4 ITA.No.1771/Hyd./2025 the learned CIT(A) has confirmed the additions and dismissed the appeal of the assessee on the ground that the assessee failed to substantiate her claim by furnishing the requisite documentary evidences even after giving sufficient opportunities of being heard. The learned Authorised Representative of the Assessee has submitted that this finding of the learned CIT(A) is contrary to the fact and record as the assessee has duly filed her reply and also filed the relevant documentary evidences running into 89 pages. He has referred to the acknowledgment of filing the reply and documents dated 07.08.2025 however, while passing the impugned order dated 25.08.2025 the learned CIT(A) has not considered the submissions as well as the documentary evidences filed by the assessee. Thus, he has submitted that the impugned order of the learned CIT(A) may be set aside and the matter may be remanded to the record of the learned CIT(A) for adjudication of the appeal of the assessee after considering the reply as well as documentary evidences filed by the assessee.

5 ITA.No.1771/Hyd./2025 4. On the other hand, the learned DR has relied upon the Order of the learned CIT(A) and submitted that assessee has failed to file supporting evidence either before the Assessing Officer or before the learned CIT(A) to substantiate the claim regarding the cash deposit in the bank account as well as the cost of improvement of the flat sold by the assessee during the previous year relevant to the assessment year under consideration.

5.

We have considered the rival submissions as well as relevant material on record. The learned CIT(A) has confirmed the additions made by the Assessing Officer by recording the reasons in Para no.5.6 of the impugned order as under:

“5.6. The appellant stated in the statement of facts that the appellant submitted the details and documentary evidences for the cost of improvement of Rs.20,14,600/- made to the asset sold during the relevant previous year and details and evidences for the sources of the cash deposits of Rs.55,47,000/- in her bank account. The AO examined the documentary evidences furnished by the appellant during the assessment proceedings and opined that she did not

6 ITA.No.1771/Hyd./2025 furnish satisfactory and documentary evidences in respect of cost of improvement and genuineness of the sources of cash received from different sources. During the appeal proceedings also, the appellant failed to substantiate her claim w.r.t. cost of improvement of Rs.20,14,600/- and cash deposits of Rs.55,47,000/- by furnishing requisite documentary evidences after giving sufficient opportunities of being heard.

Under the facts and circumstances of the case, the appeal of the appellant deserves dismissal based on the available material and merits of the case. Accordingly, ground nos. 1 & 2 are dismissed.”

5.1. Thus, the learned CIT(A) has stated that during the appellate proceedings also the assessee failed to substantiate her claim with respect of cost of improvement as well as cash deposits of Rs.55.47 lakhs by furnishing the requisite documentary evidence despite giving sufficient opportunities. At the outset, we note that the assessee filed reply vide acknowledgment dated 07.08.2025 placed at pages 1 and 2 of the paper book as under:

7 ITA.No.1771/Hyd./2025

8 ITA.No.1771/Hyd./2025

9 ITA.No.1771/Hyd./2025 5.2. It is evident from record that along with the reply the assessee has filed as many as 10 documents which are placed in the paper book running into 89 pages. Therefore, it is clear that the assessee duly complied with the notices issued by the learned CIT(A) by filing reply along with the documentary evidences. Further, the learned CIT(A) has neither verified/examined the said documents nor considered the same while passing the impugned order. Accordingly, in the facts and circumstances of the case and in the interest of justice, we set aside the impugned order of the learned CIT(A) and remand the matter to the record of the learned CIT(A) for fresh adjudication of the appeal of the assessee by considering the reply as well as documentary evidences filed by the assessee. Needless to say, the assessee may be given proper opportunity of hearing before passing the fresh order.

6.

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

10 ITA.No.1771/Hyd./2025 Order pronounced in the open court on 03.07.2026.

Sd/- Sd/- MANJUNATHA G VIJAY PAL RAO ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, Dated 03rd July, 2026. VBP Copy to: SILIVERU VANI GOPAL, C/O KATRAPATI & ASSOCIATES, 1-1-298/2/B/3, SOWBHAGYA AVENUE 1 APTS, 1ST FLOOR, ASHOK NAGAR, STREET NO.1,, HYDERABAD-500020, TELANGANA 2 ITO, WARD-1, NANDYAL, 25/82, SANJEEVA NAGAR, NANDYAL - 518501, ANDHRA PRADESH 3 THE Pr. CIT, Kurnool 4 THE D.R., ITAT, HYDERABAD B-BENCH, Hyderabad. 5 GUARD FILE TRUE COPY VADREVU Digitally signed by VADREVU PRASADA PRASADA RAO ASSISTANT REGISTRAR / Date: 2026.07.03 RAO I.T.A.T., HYDERABAD 10:48:17 +05'30'

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