SARANYA ANBARASU,CHENNAI vs. ITO, NCW-22(4), CHENNAI, TAMBARAM

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ITA 617/CHNY/2026Status: DisposedITAT Chennai04 May 2026AY 2019-205 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition was based on conjectures and surmises without supporting evidence. Therefore, the addition sustained by the FAA was deleted.

What were the facts?

The assessee's mother sold a property for Rs. 30 lakhs. During a search of the purchaser, Rs. 24,35,000 was withdrawn in cash. The AO presumed this was an on-money payment to the assessee and added it to her income on a protective basis.

What were the issues?

Whether the addition of unexplained cash as on-money payment is sustainable without supporting evidence. Whether a protective addition can be sustained when no substantive addition is made elsewhere.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 147,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI GEORGE GEORGE K & SHRI S.R. RAGHUNATHA

Hearing: 30.04.2026Pronounced: 04.05.2026

आदेश/ O R D E R

PER GEORGE GEORGE K, VICE PRESIDENT: This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 03.12.2025 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2019-20.

ITA No.617/CHNY/2026 :- 2 -: 2. Brief facts of the case are as follows: The assessee is an individual. For the assessment year 2019-20, assessee did not file any return of income since she was not having income above the taxable limit. During the relevant assessment year, assessee’s mother had sold a property for consideration of Rs.30 lakhs. The sale deed was executed on 12.04.2018. The sale deed showed assessee is one of the three vendors i.e., vendor No.2 whereas vendor No.1 & 3 are the mother and brother of the assessee respectively. As per sale deed, assessee and her brother had joined the sale deed as a matter of abundant caution and only to avoid any legal complications. The entire sale consideration of Rs.30 lakhs was paid to the mother of the assessee.

3.

There was a search in the premises of the purchaser of the impugned property. During the course of search, it was noticed that the purchaser on the day before the registration of the impugned property had withdrawn a sum of Rs.24,35,000/- in cash. Therefore, it was presumed by the AO that assessee had received this cash payment of Rs.24,35,000/- in lieu of sale of the property. In the assessment completed u/s.147 r.w.s.144B of the Act (order dated 01.03.2024), said sum of Rs.24,35,000/- was added to the income of the assessee as unexplained money

ITA No.617/CHNY/2026 :- 3 -: u/s.69A r.w.s.115BBE of the Act. However, the AO in the said order treated the addition on protective basis in the hands of the assessee. The relevant finding of the AO reads as follows:- “The assessment is completed on total income of Rs.24,35,000/- u/s.143(3)/147 read with section 144B of the I.T Act, 1961 on protective basis to avoid any loss of revenue in this case i.e. later on if it is revealed that the amount of Rs.24,35,000/- has been added to the income of either mother of the assessee or the brother of the assessee shall be taxed accordingly. Computation of income & notice of demand is attached. Charge interest u/s 234A, B, C, D, F as per Act.”

4.

Aggrieved, assessee filed appeal before the First Appellate Authority (FAA). The FAA noticed that in the present case no substantive addition has been made in the hands of the mother or in the hands of the brother of the assessee (refer para 6.3 of the impugned order of FAA). The FAA after having noted that no substantive addition has been made addition u/s.69A r.w.s.115BBE of the Act restricted the addition in the hands of assessee to 1/3rd of the impugned amount of Rs.24,35,000/- i.e., Rs.8,11,667/-.

5.

Aggrieved, assessee has filed the present appeal before the Tribunal. The Ld.AR has filed a paper-book enclosing therein written submissions filed before the FAA, copy of sale deed, return of income filed pursuant to the notice issued u/s.148 of the Act, replies submitted during the course of assessment proceedings and

ITA No.617/CHNY/2026 :- 4 -: the bank statements of the assessee’s mother, etc. The Ld.AR reiterated the submissions made before the income-tax authorities.

6.

The Ld.DR on the other hand relied on the orders of the AO and the FAA.

7.

We have heard rival submissions and perused the material on record. In the instant case, the assessee’s mother had sold a property vide deed dated 12.04.2018 for consideration of Rs.30 lakhs. Since there was a search in the case of purchaser and the purchaser having withdrawn sum of Rs.24,35,000/- prior to the date of registration of sale deed, the AO presumed the cash withdrawn has been utilized by the purchaser for making on-money payment to the assessee and accordingly, made addition on protective basis in the hands of the assessee for a sum of Rs.24,35,000/- u/s.69A r.w.s.115BBE of the Act. The FAA after noticing there is no substantive addition made in the hands of the mother or brother of the assessee confirmed the addition to the extent of 1/3rd of the impugned amount of Rs.24,35,000/-.

8.

In the instant case, addition of Rs.24,35,000/- u/s.69A r.w.s.115BBE of the Act is not based on any material unearthed

ITA No.617/CHNY/2026 :- 5 -: during the course of search in the premises of the purchaser of the impugned property. The AO has made addition only on conjectures and surmises without any supporting evidences. Therefore, the addition sustained by the FAA to the extent of Rs.8,11,667/- (1/3rd of Rs.24,35,000/-) is not warranted and is hereby, deleted. Since, we have decided the grounds relating to merits in favour of assessee, the grounds relating to validity of reopening of assessment is not adjudicated. Accordingly, the appeal of the assessee is partly-allowed.

9.

In the result, the appeal filed by the assessee is partly-allowed.

Order pronounced in the open court on 4th May, 2026 at Chennai.

Sd/- Sd/- (एस.आर. रघुनाथा) (जॉज� जॉज� के) (S.R. RAGHUNATHA) (GEORGE GEORGE K) उपा�य� /VICE PRESIDENT लेखा सद�य/ACCOUNTANT MEMBER चे�ई/Chennai, �दनांक/Dated, the 4th May, 2026 RSR, Sr.PS आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त /CIT, Chennai 4. �वभागीय ��त�न�ध/DR 5. गाड� फाईल/GF. By Order Digitally signed by REKHA REKHA SENTHIL RAJ SENTHIL RAJ Date: 2026.05.06 11:50:18 +05'30'

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