JAYASHREE CHOUGALA,DHARWAD vs. INCOME TAX OFFICCCER WARD 1(1), HUBLI, DHARWAD

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ITA 2935/BANG/2025Status: DisposedITAT Bangalore11 June 2026AY 2020-214 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had discharged the primary onus by providing bank confirmations and an affidavit confirming the loan repayment. The lower authorities had not examined the evidence and made additions based on presumption.

What were the facts?

The assessee received ₹6,00,000 through banking channels, which she explained as repayment of a loan given for medical treatment. The AO treated this as unexplained investment under Section 69A and added accrued interest. The CIT(A) dismissed the appeal ex parte.

What were the issues?

Whether the addition of unexplained investment under Section 69A is sustainable when the assessee provides documentary evidence of loan repayment through banking channels.

Which sections of the Income-tax Act were involved?

Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, BANGALORE

Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY

For Appellant: Ms. Anitha K Siddatagimmath and Shri Kalmesh
For Respondent: Shri Ganesh R Ghale, Advocate – Standing
Hearing: 04.06.2026Pronounced: 11.06.2026

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

ITA No.2935/Bang/2025 Assessment Year: 2020-21 Jayashree Chougala, Vs. The Income Tax Officer, 34B/2A, Rajatatna, C/MR Kappali, Ward – 1(1), Yalakki Shettar Colony, Dharwad, Hubli. Hubli – 580 008. PAN – AGXPC 5251 C APPELLANT RESPONDENT Assessee by : Ms. Anitha K Siddatagimmath and Shri Kalmesh S Siddatagimath, Advocates. Revenue by : Shri Ganesh R Ghale, Advocate – Standing Counsel for Revenue Date of hearing : 04.06.2026 Date of Pronouncement : 11.06.2026 O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:

This appeal filed by the assessee is directed against the order passed by the learned Commissioner of Income Tax (Appeals), NFAC, Delhi for Assessment Year 2020-21 vide order dated 14/10/2025, whereby the addition of ₹6,00,000 made under section 69A of the Income-tax Act, 1961 and ₹24,970 towards accrued interest has been sustained.

ITA No.2935/Bang/2025 Page 2 of 4 2. The assessee is an individual. The assessee explained before the Assessing Officer that the amount of ₹6,00,000 was received through banking channels from Shri Raju Godare and represented repayment of loan/advance earlier given by the assessee towards his medical treatment. However, the AO completed assessment for A.Y. 2020-21 under section 147 r.w.s. 144 of the Act on the basis of information that the assessee had made an investment in a Time Deposit of ₹6,00,000 without filing return of income. The Assessing Officer treated the said investment as unexplained money under section 69A of the Act and also brought to tax accrued interest of ₹24,970, thereby assessing total income at ₹6,24,970.00 only. In appeal, the learned CIT(A) dismissed the appeal ex parte observing non-compliance to notices and sustained the additions.

3.

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

4.

The learned Authorised Representative (AR) submitted that both the lower authorities have failed to appreciate the material evidence placed on record. It was submitted that the assessee had filed a detailed Paper Book running from pages 1 to 111. The learned AR specifically drew attention to the bank confirmation/letter evidencing receipt of ₹6,00,000 through banking channel, placed at page 52 of the Paper Book. Affidavit of Smt. Suman Raju Godare, wife and legal heir of late Shri Raju Godare, placed at pages 64 to 66 of the Paper Book, wherein it has been categorically confirmed that the amount of ₹6,00,000 represents repayment/return of loan to the assessee. It was thus submitted that the identity of the payer, genuineness of the transaction, and source through

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ITA No.2935/Bang/2025 Page 3 of 4 banking channel stands duly established and therefore the addition under section 69A of the Act is unsustainable.

4.1 The learned Departmental Representative (DR), on the other hand, strongly relied upon the orders of the authorities below.

5.

We have carefully considered the rival submissions and perused the materials available on record. We have also gone through the Paper Book filed by the assessee. It is an undisputed fact that the amount of ₹6,00,000 has been received by the assessee through banking channels. The assessee has placed on record a bank confirmation/statement evidencing receipt of the amount. Further, an affidavit sworn by Smt. Suman Raju Godare, being the legal heir of the original creditor, clearly confirms that the amount in question represents repayment of loan earlier advanced by the assessee. The lower authorities have rejected the explanation primarily on the ground of non-compliance during appellate proceedings and have not undertaken any independent examination of the documentary evidence already available on record. It is settled law that even in ex parte proceedings, the appellate authority is required to adjudicate the matter on merits based on available materials on record. In the present case, once the assessee has discharged the primary onus by demonstrating receipt through banking channel and furnishing supporting affidavit confirming the nature of transaction, the burden shifts to the Revenue to bring contrary material on record, which has not been done.

5.1 We also find that the explanation of the assessee is supported by corroborative evidence and is not found to be inherently improbable.

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ITA No.2935/Bang/2025 Page 4 of 4 Therefore, the addition made under section 69A of the Act is based on mere presumption and cannot be sustained in law. In view of the above facts and circumstances, we hold that the addition of ₹6,00,000 made under section 69A of the Act is not sustainable and is directed to be deleted. Hence, the ground of appeal of the assessee is allowed.

6.

In the result, the appeal of the assessee is allowed.

Order pronounced in court on 11th day of June, 2026

Sd/- Sd/- (KESHAV DUBEY) (WASEEM AHMED) Judicial Member Accountant Member Bangalore Dated, 11th June, 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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