RAJA SEKHAR NERAVATI,HYDERABAD vs. ITO (INT TAXN)-2, HYDERABAD

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B‘ 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. 968/Hyd/2025 (िनधा�रण वष�/Assessment Year: 2014-15) Shri Raja Sekhar Neravati Vs. Income Tax Officer Hyderabad (International PAN:ACCPN9627L Taxation)-2 Hyderabad (Appellant) (Respondent) िनधा��रती �ारा/Assessee by: Advocate Sashank Dundu & Advocate M. Prudhiviraj राज� व �ारा/Revenue by: Dr. Sachin Kumar, Sr. AR सुनवाई की तारीख/Date of hearing: 04/06/2026 घोषणा की तारीख/Pronouncement: 03/07/2026 आदेश/ORDER Per Madhusudan Sawdia, A.M.:

This appeal is filed by Shri Raja Sekhar Neravati (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals)-10, Hyderabad (“Ld. CIT(A)”) dated 19.03.2025 for the A.Y. 2014-15. 2. The assessee has raised the following grounds of appeal:

of ₹27,250/-. During the reassessment proceedings, the assessee offered interest income of ₹64,852/-. The Ld. AO observed that the assessee had deposited cash aggregating to ₹1,20,39,500/- in three bank accounts during the year under consideration. The Ld. AO was not satisfied with the explanation furnished by the assessee regarding the source of such cash deposits. Accordingly, the Ld. AO treated the entire cash deposits of ₹1,20,39,500/- as unexplained cash credits under section 68 of the Act and added the same to the income of the assessee. The Ld. AO completed the assessment under section 147 read with section 144C(3) of the Act vide order dated 30.05.2022 making addition of ₹1,20,39,500/- under section 68 of the Act and ₹64,852/- on account of interest income offered by the assessee and assessed the total income of the assessee at ₹1,21,31,602/-. 4. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). During the appellate proceedings, the assessee explained that part of the cash deposits represented return of advances earlier given for purchase of agricultural lands. After considering the submissions of the assessee and the remand report of the Ld. AO, the Ld. CIT(A) granted substantial relief and sustained addition of only ₹28,00,000/- comprising ₹12,50,000/- allegedly received back from Shri A. Sudhakar Reddy and ₹15,50,000/- allegedly received back from Shri V. Vishnu Vardhan Reddy. 5. Aggrieved by the order of the Ld. CIT (A), the assessee is in appeal before the Tribunal. The Learned Authorized Representative (“Ld. AR”) submitted that the only

surviving issue in the present appeal is the sustenance of addition of ₹28,00,000/- by the Ld. CIT(A). The Ld. AR submitted that the assessee had advanced a sum of ₹12,50,000/- to Shri A. Sudhakar Reddy and a sum of ₹15,50,000/- to Shri V. Vishnu Vardhan Reddy for purchase of agricultural lands. However, as the proposed transactions could not materialize, both the parties returned the advances in cash to the assessee on 10.06.2013. The Ld. AR further submitted that Shri A. Sudhakar Reddy had confirmed receipt of advance and subsequent return thereof. It was further submitted that during the remand proceedings before the Ld. AO, summons under section 131 of the Act were issued to Shri A. Sudhakar Reddy. However, due to illness he could not personally appear before the Ld. AO. According to the Ld. AR, merely because Shri A. Sudhakar Reddy could not appear before the Ld. AO, the genuine transaction should not be disbelieved. 6. With regard to the amount of ₹15,50,000/- received from Shri V. Vishnu Vardhan Reddy, the Ld. AR submitted that Shri V. Vishnu Vardhan Reddy had expired by the time summons under section 131 of the Act were issued during the remand proceedings and therefore compliance with such summons was not possible. It was accordingly submitted that the addition sustained by the Ld. CIT(A) deserves to be deleted. 7. Per contra, the Learned Departmental Representative (“Ld. DR”) strongly relied upon the orders of the lower authorities. Inviting our attention to para no. 6 of the assessment order, the Ld. DR submitted that during the assessment proceedings the assessee initially explained the

source of cash deposits as being out of his past savings. Subsequently, during the same proceedings, the assessee changed his version and stated that a sum of ₹65,00,000/- was received from his father. The Ld. DR further submitted that before the Ld. CIT(A), the assessee again changed his stand and claimed that a sum of ₹87,50,000/- represented return of advances from various farmers to whom advances had allegedly been given for purchase of agricultural lands. Thus, according to the Ld. DR, the assessee had taken mutually inconsistent stands at different stages of the proceedings. The Ld. DR submitted that despite these inconsistencies, the Ld. CIT(A) granted an opportunity to the assessee and remanded the matter to the file of the Ld. AO for verification. During the remand proceedings, summons under section 131 of the Act were issued to both Shri A. Sudhakar Reddy and Shri V. Vishnu Vardhan Reddy. However, neither of them appeared before the Ld. AO. The Ld. DR further submitted that in respect of Shri V. Vishnu Vardhan Reddy, the assessee has failed to furnish any documentary evidence such as agreement for purchase of land, receipt evidencing payment of advance, cancellation of agreement, confirmation regarding repayment or any other supporting evidence. Therefore, according to the Ld. DR, the assessee has completely failed to establish the genuineness of the alleged transaction of ₹15,50,000/-. The Ld. DR accordingly submitted that the order of the Ld. CIT(A) sustaining the addition deserves to be upheld. 8. We have heard the rival submissions and perused the material available on record. The solitary issue involved in the present appeal relates to the addition of ₹28,00,000/- sustained by the Ld. CIT(A) out of the addition made by the Ld.

AO under section 68 of the Act. From the record, we find that the assessee has taken different stands at different stages regarding the source of cash deposits. In this regard, we have gone through para no. 6 to 8 of the order of the Ld. AO which is to the following effect:

Reddy. Accordingly, we find no infirmity in the order of the Ld. CIT(A) in sustaining the addition of ₹15,50,000/- and the same is hereby confirmed. 10. Coming to the addition of ₹12,50,000/- relating to Shri A. Sudhakar Reddy, it has been submitted that the assessee has furnished a confirmation letter from Shri A. Sudhakar Reddy. The assessee has also explained that Shri A. Sudhakar Reddy could not appear before the Ld. AO in response to summons issued under section 131 of the Act due to illness. Considering the fact that a written confirmation has been filed by Shri A. Sudhakar Reddy and keeping in view the explanation regarding his illness, we are of the considered opinion that one more opportunity deserves to be granted to the assessee in the interest of justice for substantiating the genuineness of the transaction. Accordingly, the issue relating to the addition of ₹12,50,000/- allegedly received from Shri A. Sudhakar Reddy is restored to the file of the Ld. AO. The Ld. AO shall issue fresh summons under section 131 of the Act to Shri A. Sudhakar Reddy and verify the genuineness of the transaction. Thereafter, the Ld. AO shall decide the issue afresh in accordance with law after providing adequate opportunity of being heard to the assessee. The assessee is directed to extend full cooperation during the proceedings and shall not seek unnecessary adjournments. Failure on the part of the assessee to cooperate with the proceedings shall entitle the Ld. AO to decide the matter on the basis of material available on record. Accordingly, the addition of ₹15,50,000/- relating to Shri V. Vishnu Vardhan Reddy is confirmed, whereas the addition of ₹12,50,000/- relating to Shri A.

Sudhakar Reddy is restored to the file of the Ld. AO for fresh adjudication in terms indicated hereinabove.

Order pronounced in the Open Court on 3rd July, 2026. Sd/- Sd/- (RAVISH SOOD) (MADHUSUDAN SAWDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, dated 3rd July, 2026. Vinodan/sps Copy to: S.No Addresses 1 Shri RAJA SEKHAR NERAVATI FLAT NO-114 TOWER DAFFODIL L &T,SCRENE COUNTY TELECOM NAGAR GACHIBOWLI HYDERABAD 500032,Telangana 2 Income Tax Officer (International Taxation)-2 Aayakar Bhavan, Opp: LB Stadium, Basheerbagh, Hyderabad 500004 3 Pr. CIT - Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File

By Order TUMMALACHARLA Digitally signed by 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: 2026.07.03 11:59:35 +05'30'