J. RAMYA VARSHINI,MADURAI vs. ITO, NCW-1(7), MADURAI

आदेश / O R D E R

PER MANU KUMAR GIRI, JM:

The captioned appeals filed by the assessee are against the separate orders of even date 11.09.2025 of the ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [In short “the Ld. CIT(A)”] for the assessment years (A.Ys.) 2014-15 and 2015-16.

ITA No.3520-3521/Chny/2025 (AYs: 2014-15 & 2015-16) J. Ramya Varshini Vs ITO NCW 1(7) :: 2 :: 2. Grounds of appeal for AY 2014-15 raised by the assessee are as below: 1. The Commissioner of Income-tax (Appeals) (the "CIT(A)") erred both in law and facts of the case in upholding the additions made by the Assessing Officer ("AO") as unexplained cash credit u/s 68 of the Act, amounting to 51,66,247/-, being the capital balance of the Appellant at the end of the assessment year (31 March 2014). 2. The CIT(A) erred in not appreciating the fact that opening balance of the capital was sourced from amounts received by the Appellant at the time of her marriage on 8th July 2012 (previous assessment year) and not an income of the current assessment year. 3. The CIT(A) failed to consider that the gifts received during weddings are exempt under proviso to section 56(2)(vi) of the Act and that such gifts, by their very nature, are not always supported by documentation. The conclusion that the Appellant failed to prove the source of her capital is therefore erroneous. 4. The CIT(A) failed to appreciate that the capital represented the closing balance of the previous years, and since the Appellant filed her return of income for the first time in assessment year 2014-15, the entire accumulated personal assets were reflected for the first time as opening capital. 5. Despite submitting that the accumulated personal assets during the preceding years were reflected as opening balance of the capital, the Appellant cannot be called on to explain source of the source. 6. The CIT(A) further erred in treating the entire capital balance as unexplained cash credit, ignoring the fact that it included income of ₹2,76,203/- already disclosed and offered to tax by the Appellant. The addition therefore resulted in double taxation. 7. The CIT(A) failed to appreciate that the income assessed cannot be presumed to be undisclosed in nature since the AO has not shown any evidence showing that assessee had any other source of income which needs to be taxed u/s 115BBE of the Act. 8. The Appellant prays that: a. the order passed by the CIT(A) under section 250 of the Act upholding the addition be set aside; and b. any other remedy necessary and ancillary to this prayer be passed that the Bench may deem fit.

ITA No.3520-3521/Chny/2025 (AYs: 2014-15 & 2015-16) J. Ramya Varshini Vs ITO NCW 1(7) :: 3 :: 3. Facts for AY:2014-15: The appellant is an individual assessee who filed the return of income for Assessment Year 2014-15 on 27.05.2016 declaring a total income of Rs.2,69,760/-. Based on information available with the Income Tax Department, it was noticed that the assessee had introduced an opening capital balance of Rs. 51,66,247/-. According to the Assessing Officer (“AO”), the source of such opening capital was not satisfactorily explained. Accordingly, after obtaining the necessary approval/sanction, the assessment was reopened under Section 147 of the Income-tax Act, 1961, and notice under Section 148 was issued on 31.03.2021. Subsequently, notices under Sections 142(1) and 143(2) were issued on 24.02.2022 and 23.02.2022 respectively. In response to the notice under Section 148, the assessee filed a return of income on 03.11.2021 vide acknowledgement No. 783094960031121. However, the assessment order incorrectly recorded that no return had been filed in response to the notice under Section 148. During the reassessment proceedings, the assessee contended that this was the first year in which she had filed a return of income and, therefore, all assets and investments acquired in earlier years were disclosed in the balance sheet by bringing them forward as opening capital. It was specifically submitted that no fresh investment had been made during the relevant assessment year and that the opening capital represented past savings, earlier investments, and ancestral jewellery. 3.1 The assessee further submitted that Section 68 was not applicable since no sum had been credited in the books during the relevant previous year. It was argued that the opening capital

ITA No.3520-3521/Chny/2025 (AYs: 2014-15 & 2015-16) J. Ramya Varshini Vs ITO NCW 1(7) :: 4 :: balance merely represented assets and investments accumulated in earlier years and brought forward into the current year’s balance sheet. Despite the above explanations and submissions made during the assessment proceedings and video conference hearing, the Assessing Officer rejected the contentions of the assessee and completed the reassessment under Sections 147/144B vide order dated 30.03.2022 by treating the opening capital balance of Rs.51,66,247/- as unexplained cash credit under Section 68 and assessed the total income at Rs. 54,36,007/-. 4. Being aggrieved by the reassessment order and the addition made under Section 68, the assessee preferred appeal before the CIT(A). The appellant has challenged the addition of Rs. 51,66,247/- made by the Assessing Officer under Section 68 of the Income-tax Act, 1961. The ld. CIT(A) observed that, based on information available with the department, it was noticed that the assessee had introduced an opening capital of Rs. 51,66,247/-. Since the source of the said opening capital was not satisfactorily explained, the Assessing Officer reopened the assessment after obtaining necessary approval/sanction and issued notice under Section 148 dated 31.03.2021. During the course of assessment proceedings, despite sufficient opportunities being granted, the assessee failed to produce any documentary evidence in support of the claim that the capital introduced represented past savings, earnings, or gifts received. In the absence of satisfactory explanation and supporting evidence, the Assessing Officer treated the entire amount of Rs. 51,66,247/- as unexplained cash credit under Section 68 of the Act and added the same to the total income of the assessee. During the appellate proceedings, the assessee

ITA No.3520-3521/Chny/2025 (AYs: 2014-15 & 2015-16) J. Ramya Varshini Vs ITO NCW 1(7) :: 5 :: filed written submissions through the ITBA module. The submissions made by the appellant were duly considered by the ld. CIT(A). However, it was observed that the appellant failed to furnish any corroborative documentary evidence to establish the source, nature, and genuineness of the capital introduced or to substantiate the grounds raised in appeal. It is a settled principle that the onus lies upon the assessee to prove the identity, creditworthiness, and genuineness of the credits appearing in the books of account by producing cogent and reliable evidence. In the absence of any supporting documentary evidence, the explanations offered by the appellant remain unsubstantiated. Accordingly, in the absence of any material evidence warranting a contrary view, there is no reason to interfere with the findings recorded by the Assessing Officer. The ld. CIT(A) finds no infirmity in the assessment order. Therefore, the addition of Rs. 51,66,247/- made under Section 68 of the Income-tax Act, 1961 is hereby sustained on merits and the grounds of appeal raised by the appellant are dismissed. 5. GROUNDS OF APPEAL FOR AY 2015-16: 1. The Commissioner of Income-tax (Appeals) ("CIT(A)") erred in both law and on facts in upholding the addition of ₹21,98,701/- made by the Assessing Officer ("AO"). The AO had treated cash deposits of ₹27,00,350/- as unexplained, and after reducing the Appellant's declared income of ₹5,01,649/-, sustained an addition of ₹21,98,701/-. 2. The CIT(A) failed to appreciate that the AO erroneously reduced only the income of Rs.5,01,649/-, without considering the cash receipts by the Appellant from loans given to her relatives in the Financial Year 2013-14. 3. The CIT(A) failed to appreciate the fact that the Appellant had extended interest free loan of ₹35,11,162/-, to her relatives in the Financial year 2013-14 out of the wedding gifts received by her, and out of which 33,81,288/- was received by the Appellant in the relevant assessment year, which was deposited in her bank account.

ITA No.3520-3521/Chny/2025 (AYs: 2014-15 & 2015-16) J. Ramya Varshini Vs ITO NCW 1(7) :: 6 :: 4. The CIT(A) erred in law in not considering that the additions could not have been made under section 69A of the Act which deals with monies not recorded in the books of accounts and for which no explanation or no satisfactory explanation is offered by the Appellant. Whereas in the case of the Appellant, all the transactions were recorded in her books of accounts and were also fully explained. 5. The CIT(A) failed to consider the detailed day book and other records furnished by the Appellant, which clearly captured all day to day business transactions including the amount of ₹33,81,288/- received from her relatives. The rejection of these records without providing any reason is unjustified. 6. The CIT(A) failed to appreciate that the income assessed cannot be presumed to be undisclosed in nature since the AO has not shown any evidence showing that Appellant had any other source of income which needs to be taxed u/s 115BBE of the Act. 7. The Appellant prays that: a. the order passed by the CIT(A) under section 250 of the Act upholding the addition be set aside; and b. any other remedy necessary and ancillary to this prayer be passed that the Bench may deem fit. 8. The Appellant craves leave to add, alter, amend or withdraw any of the above grounds at the time of hearing. 6. BRIEF FACTS OF THE CASE FOR AY 2015-16: The appellant is an individual engaged in the business of money lending and maintaining regular books of accounts. The appellant filed the return of income for Assessment Year 2015–16 on 28.05.2016 declaring a total income of Rs. 4,51,820/-. Based on information available with the Income Tax Department, it was noticed that the assessee had deposited cash amounting to Rs. 27,00,350/- in her savings bank account during the relevant previous year. According to the Assessing Officer (“AO”), the source of the said cash deposits remained unexplained. Accordingly, after obtaining the necessary approval/sanction, the assessment was reopened under Section 147 of the Income-tax Act, 1961 and notice

ITA No.3520-3521/Chny/2025 (AYs: 2014-15 & 2015-16) J. Ramya Varshini Vs ITO NCW 1(7) :: 7 :: under Section 148 was issued on 31.03.2021. In response to the notice issued under Section 148, the assessee filed a return of income on 03.11.2021 declaring the same income of Rs. 4,51,820/- as originally returned. Thereafter, notices under Sections 143(2) and 142(1) were issued on 23.02.2022 and 24.02.2022 respectively. During the course of reassessment proceedings, the assessee submitted that the cash deposits represented recovery of loans advanced to various parties in the course of her money lending business. It was contended that the outstanding loans reflected in the balance sheet as on 31.03.2014 were realized during the year and the amounts so collected were deposited into the bank account. The assessee further submitted that the deposits were duly recorded in the regular books of accounts and verifiable from the balance sheets as on 31.03.2014 and 31.03.2015. However, the Assessing Officer was not satisfied with the explanation furnished by the assessee and held that the assessee had failed to substantiate the source of the cash deposits with satisfactory documentary evidence. Consequently, the AO completed the reassessment under Sections 147/144B vide order dated 27.03.2022 and made an addition under Section 68 of the Income-tax Act. While the total cash deposits considered were Rs. 27,00,350/-, the Assessing Officer granted credit for Rs. 5,01,649/- stated to be sales admitted by the assessee and treated the balance amount of Rs. 21,98,701/- as unexplained cash credit under Section 68. Accordingly, the total income was assessed at Rs. 26,50,521/-.

ITA No.3520-3521/Chny/2025 (AYs: 2014-15 & 2015-16) J. Ramya Varshini Vs ITO NCW 1(7) :: 8 :: 7. Aggrieved by the reassessment order and the addition made under Section 68, the assessee has preferred appeal before the ld.CIT(A). 8. The appellant has challenged the addition of Rs. 21,98,701/- made by the Assessing Officer under Section 69A of the Income-tax Act, 1961. The ld. CIT(A) observed that, during the course of assessment proceedings, the Assessing Officer noticed that the assessee had deposited cash amounting to Rs. 27,00,350/- in her bank account, the source of which remained unexplained. Consequently, notices under Sections 143(2) and 142(1) of the Act were issued calling upon the assessee to furnish complete details and supporting documentary evidence regarding the source of the cash deposits. In response, the assessee submitted that the impugned cash deposits represented recovery of micro loans advanced to various parties in the ordinary course of her money lending business. However, the assessee failed to furnish any documentary evidence in support of such claim, including loan agreements, confirmations, receipts, ledger extracts, or even the names and addresses of the borrowers to whom such loans were allegedly advanced. The ld. CIT(A) further observed that the assessee had disclosed turnover/sales of Rs. 5,01,649/- in the return of income filed for the relevant assessment year. The Assessing Officer, after giving credit for the said amount, treated the balance amount of Rs. 21,98,701/- out of the total cash deposits of Rs. 27,00,350/- as unexplained money under Section 69A of the Act and added the same to the total income of the assessee. During the appellate proceedings, the assessee filed written submissions through the ITBA module. The submissions and

ITA No.3520-3521/Chny/2025 (AYs: 2014-15 & 2015-16) J. Ramya Varshini Vs ITO NCW 1(7) :: 9 :: material available on record were duly considered by the ld. CIT(A). However, it was noted that even at the appellate stage, the assessee failed to substantiate the source of the cash deposits by producing any corroborative documentary evidence in support of the grounds raised in appeal. The ld. CIT(A) held that the burden squarely lies upon the assessee to establish the nature and source of the cash deposits with cogent and credible evidence. Mere oral submissions or unsubstantiated explanations, unsupported by documentary proof, are not sufficient to discharge the onus cast upon the assessee under the provisions of the Act. In the absence of any material evidence supporting the explanation furnished by the assessee, the ld. CIT(A) found no reason to interfere with the findings of the Assessing Officer and held that there was no infirmity in the assessment order. Accordingly, the addition of Rs. 21,98,701/- made under Section 69A of the Income-tax Act, 1961 was sustained on merits and the grounds of appeal raised by the appellant were dismissed. Now the assessee challenged both the orders of the ld.CIT(A) before this Tribunal. 9. Before us, the assessee has filed written submissions along with documents from page 15 to 226. We find that documents from page 15 to 226 are additional evidence which were not filed before the authorities below. The submission dated 20.03.2026 filed before us are as under:

ITA No.3520-3521/Chny/2025 (AYs: 2014-15 & 2015-16) J. Ramya Varshini Vs ITO NCW 1(7) :: 10 ::

ITA No.3520-3521/Chny/2025 (AYs: 2014-15 & 2015-16) J. Ramya Varshini Vs ITO NCW 1(7) :: 11 ::

9.

ITA No.3520-3521/Chny/2025 (AYs: 2014-15 & 2015-16) J. Ramya Varshini Vs ITO NCW 1(7) :: 12 ::

ITA No.3520-3521/Chny/2025 (AYs: 2014-15 & 2015-16) J. Ramya Varshini Vs ITO NCW 1(7) :: 13 ::

ITA No.3520-3521/Chny/2025 (AYs: 2014-15 & 2015-16) J. Ramya Varshini Vs ITO NCW 1(7) :: 14 ::

10.

ITA No.3520-3521/Chny/2025 (AYs: 2014-15 & 2015-16) J. Ramya Varshini Vs ITO NCW 1(7) :: 15 ::

ITA No.3520-3521/Chny/2025 (AYs: 2014-15 & 2015-16) J. Ramya Varshini Vs ITO NCW 1(7) :: 16 ::

ITA No.3520-3521/Chny/2025 (AYs: 2014-15 & 2015-16) J. Ramya Varshini Vs ITO NCW 1(7) :: 17 :: paper book. It is an admitted position that these documents were not produced before the Assessing Officer or the ld. CIT(A). The assessee has sought to rely upon these documents to substantiate her explanations regarding opening capital for A.Y. 2014-15 and cash deposits for A.Y. 2015-16. Since the said documents constitute additional evidence within the meaning of Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963, and have not been examined by the lower authorities, we are of the considered view that the same require proper verification at the level of the Assessing Officer. The issues involved are factual in nature, particularly relating to source of capital, alleged gifts, loan transactions, and cash flow trail, which require detailed examination and reconciliation with books of account and bank statements. In the interest of justice and fair play, we deem it appropriate to restore both the appeals to the file of the ld. CIT(A) for fresh adjudication. The ld. CIT(A) shall admit the additional evidence filed by the assessee, if found admissible in accordance with law, and shall call for a remand report from the Assessing Officer after conducting necessary verification / examination of the documents furnished by the assessee. The Assessing Officer shall be afforded adequate opportunity to examine the additional evidence and furnish his remand report. Thereafter, a copy of the remand report shall be made available to the assessee, who shall be granted opportunity to file a rejoinder. The ld. CIT(A) shall thereafter decide both the appeals afresh on merits, in accordance with law, after considering the remand report of the Assessing Officer, the rejoinder of the assessee, and all other material available on record.

ITA No.3520-3521/Chny/2025 (AYs: 2014-15 & 2015-16) J. Ramya Varshini Vs ITO NCW 1(7) :: 18 :: 11. We make it clear that we have not expressed any opinion on the merits of the additions made by the Assessing Officer and sustained by the ld. CIT(A). All issues are kept open for adjudication by the ld. CIT(A). 12. In the result, both the appeals of the assessee are allowed for statistical purposes.

Order pronounced in the open court on 12th day of May, 2026 at Chennai.

Sd/- Sd/- (प�ावती एस) (मनु कुमार िग#र) (PADMAVATHY S) (MANU KUMAR GIRI) लेखा सद#या/ACCOUNTANT MEMBER $या�यक सद#य/JUDICIAL MEMBER चे$नई/Chennai, &दनांक/Dated: 12th May, 2026. SNDP आदेश क� ��त'ल(प अ)े(षत/Copy to: 1. अपीलाथ�/Appellant/Assessee 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF