ANJANEE VIJETHA KASTURI,KURNOOL vs. ITO, WARD-1, KURNOOL, KURNOOL

आदेश / O R D E R PER MANJUNATHA.G, AM:

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 13.08.2025, and pertains to assessment year 2017-

18.

her return of income (RoI) for AY 2017-18 on 30.11.2017 declaring total :: 2 :: income of Rs.7,95,070/-. The case was selected for scrutiny and during

the course of assessement proceedings, the AO noticed that the assessee

has made cash deposits of Rs.54,21,000/- into Union Bank of India a/c

No.354602010012904. The AO called upon the assessee to explain

source for cash deposits. In response, the assessee submitted that, she

has shown cash balance available out of additional income declared

during the course of survey u/s.133A of the Income Tax Act, 1961 (in

short “the Act“) for AYs 2014-15 & 2015-16 and out of loan debtors and

further out of interest income declared for the earlier financial year. The

AO, however, was not satisfied with the explanation furnished by the

assessee and according to the AO, the assessee failed to prove the

availability of cash to the tune of Rs.43,74,000/- claimed to have been

received from loan debtors by filing relevant evidences including

creditworthiness of the creditors and genuineness of the transaction. The

AO had also rejected the explanation of the assessee with regard to

source for cash deposits of Rs.3,82,500/- alleged to have receive from

Sri Maka Suresh, loan debtor on the ground that, the assessee has failed

to prove the credits, receipt of cash from loan debtors with cogent

evidences.

an appeal before the Ld.CIT (A). Before the Ld.CIT (A), the assessee

reiterated its stand taken before the Assessing Officer and submitted that

the source for cash deposit is out of amount realized from sundry debtors :: 3 :: and the same has been recorded in the books of account of the assessee.

Further, as per the cash book maintained by the assessee, the cash

balance as on 08.11.2016 is more than the amount of cash deposits to

bank account. The assessee had also furnished the list of debtors from

whom she has received cash. The Assessing Officer without appreciating

the relevant facts, made addition towards the amount received from

sundry debtors as unexplained cash credit u/s 68 of the I.T. Act, 1961.

The learned CIT (A) after considering the relevant submission of the

assessee and also taken note of the relevant reasons given by the

Assessing Officer opined that the assessee could not establish the

identify, genuineness and credit worthiness of the parties from whom the

appellant has claimed to have received back money which is evident from

the facts brought on record by the Assessing Officer which clearly shows

that the persons from whom moneys were received are petty in nature

and they did not have proper bank account. Therefore, the learned CIT

(A) opined that the appellant has not been able to explain the credits to

the satisfaction of the Assessing Officer and thus, there is no error in the

reasons given by the Assessing Officer to make the addition towards

amount claimed to have received from the sundry debtors including the

interest amounting to Rs.43,74,000/- u/s 68 of the I.T. Act, 1961.

appeal before the Tribunal.

:: 4 :: 5. The learned Counsel for the assessee submitted that the learned

CIT (A) erred in sustaining the addition made by the Assessing Officer

towards the cash credit u/s.68 of the Act without appreciating the fact

that the appellant has explained the source for cash deposit out of

repayment of loan advances from his money lending business and the

same has been recorded in the cash book. The learned Counsel for the

assessee took us to the relevant evidences including the statement

recorded during the course of survey on 20.02.2015 where the appellant

has offered sum of Rs.20 lakhs each for A.Y 2014-15 & 2015-16. He

further took us to the assessment order passed by the Assessing Officer

for both the A.Ys where the Assessing Officer has accepted additional

income offered by the assessee towards possible discrepancies in loans

and advances given by the assessee and interest earned from the above

party. The appellant has received back the loan and advances given to

various parties with interest and the same has been recorded in his books

of account which is the source for cash deposit during the demonetization

period. The assessee had also obtained confirmation letters from the

parties to prove the identity, genuineness of the transaction and

creditworthiness of the parties. The Assessing Officer and the learned CIT

(A) without appreciating the relevant facts made addition u/s 68 of the

I.T. Act.

of the Ld.CIT(A) submitted that the assessee has made huge cash :: 5 :: deposits during demonetization period and initially claimed to have been

explained source from past savings, however, changed the version.

Subsequently claimed that source is out of refund from loan debtors but

fact remains that the assessee although proved identity of loan debtors

but failed to prove the genuineness of transaction and creditworthiness of

loan debtors. Further, the assessee also failed to prove the availability of

cash in hand when the cash was deposited into bank account. In the

absence of relevant details, merely on the basis of additional income

offered during earlier financial years, it can’t be said that the assessee is

having sufficient source to explain cash deposits into bank account during

demonetization period. Therefore, he submitted that the additions made

by the AO should be sustained.

assessment order and appellate order in the light of paper book filed by

the assessee. There is no dispute with regard to the fact that the

appellant had offered sum of Rs.20 lakhs each in consequent to survey

conducted u/s.133A of the I.T. Act, 1961 for the A.Ys 2014-15 & 2015-16

towards the loans and advances given to various parties and interest

earned therein. In fact, the Assessing Officer and the learned CIT (A)

never disputed the fact that the appellant had offered additional income

for both the A.Ys and paid taxes. The appellant claims that he had

received back sum of Rs.40 lakhs from various parties from whom he has

given loans and advances in earlier financial years. The appellant further :: 6 :: claims that he has received loans and advances given by him during this

financial year in cash along with interest amounting to Rs.43,74,000/-.

The appellant has filed the relevant details such as names and addresses

of the persons from whom he had given loan and advances and received

back during this financial year. The appellant had also filed confirmation

letters from the parties. The amount received back from the debtors has

recorded in the books of account of the assessee which is evident from

cash book maintained by the assessee. From the details furnished by the

assessee, it is abundantly clear that the appellant has received back

money from debtors in cash during the financial year 2016-17 relevant to

A.Y 2017-18 which is the source for cash deposits into the bank account

during the demonetization period. Since the appellant has furnished the

identity of the creditors and also proved the genuineness of the

transactions and their creditworthiness, in my considered opinion, the

Assessing Officer has erred in making addition towards the amount

received from debtors as unexplained cash credit u/s 68 of the I.T. Act,

1961. The learned CIT (A) without appreciating the relevant facts simply

sustained the addition made by the Assessing Officer. Thus, I set aside

the order passed by the learned CIT (A) and direct the Assessing Officer

to delete the addition made towards the amount received from sundry

debtors amounting to Rs.43,74,000/- u/s 68 of the Act.

Maka Suresh, although, the assessee claims to have received cash from

:: 7 :: loan debtors but failed to file relevant evidences to prove the genuineness

of the transaction and creditworthiness of loan debtors. In the absence of

relevant details, the AO has rightly made addition towards cash deposits

of Rs.3,82,500/- and explained by the assessee out of recovery of loan

from Sri Maka Suresh. Thus, we uphold the additions made by the AO

towards cash deposits to the tune of Rs.3,82,500/-. To sum up, out of

total additions made by the AO towards cash deposits into the bank

account of Rs.47,56,500/-, the assessee got relief to the extent of

Rs.43,74,000/- & balance amount of Rs.3,82,500/- is hereby confirmed.

Order pronounced on the 10th day of June, 2026, in Hyderabad.

Sd/- Sd/- (िवजय पाल राव) (मंजूनाथा. जी) (VIJAY PAL RAO) (MANJUNATHA.G) उपा�� /VICE-PRESIDENT लेखा सद�/ACCOUNTANT MEMBER

Hyderabad, dated 10.06.2026. TLN आदेशकी �ितिलिप अ�ेिषत/ Copy of the order forwarded to: िनधा�रती/The 1 : Anjanee Vijetha Kasturi, C/o. Katrapati & Associates, 1-1-298/2/B/3, Assessee Sowbhagya Avenue Apts, 1st Floor, Ashok Nagar, Street No.1, Hyderabad. राज�/ The Revenue : The ITO, Ward-1, Kurnool. 2 3 The Principal Commissioner of Income Tax, Kurnool. िवभागीय�ितिनिध, आयकर अपीलीय अिधकरण, हैदराबाद / DR, ITAT Hyderabad. 4 गाड�फ़ाईल / Guard file 5

आदेशानुसार / 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: 2026.06.10 17:25:08 +05'30'

Sr. Private Secretary ITAT, Hyderabad