GOVINDASWAMY SUMANGALA,BENGALURU vs. INCOME TAX OFFICER WARD 1(2)(5), BENGALURU

IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K, JUDICIAL MEMBER

ITA No.515/Bang/2026 Assessment Year: 2017-18

Govindaswamy Sumangala, The Income Tax Officer, Vs. No.11, Palace Road, Ward – 1(2)(5), Bengaluru – 560 052. Bengaluru. PAN – AYQPS 5023 F APPELLANT RESPONDENT Assessee by : Shri Surajmal Daga, CA Revenue by : Shri N Balusamy, JCIT (DR) Date of hearing : 07.05.2026 Date of Pronouncement : 21.05.2026 O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:

The present appeal has been instituted by the assessee against the order of the NFAC, Delhi passed u/s 250 of the Act dated 20.06.2025 relevant to AY 2017-18.

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3.1 We find that the explanation furnished by the assessee is bona fide and reasonable. The delay is not shown to be deliberate or due to any mala fide conduct. The assessee has also placed on record that the appeal involves substantial issues on merits, including the addition of Rs. 36.62 lakh as unexplained gift and separate addition of Rs. 23.50 lakh as unexplained cash deposit, though according to the assessee both additions arise from the same source.

3.2 It is settled law that while considering an application for condonation of delay, the expression “sufficient cause” should receive a liberal construction so as to advance substantial justice. When substantial

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justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. The Hon’ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji & Ors. [1987] 167 ITR 471 (SC) has held that courts should adopt a liberal approach in the matter of condonation of delay. Similar view has also been taken in N. Balakrishnan v. M. Krishnamurthy [1998] 7 SCC 123.

3.3 Considering the totality of facts and circumstances of the case, we are of the view that the assessee was prevented by sufficient cause from filing the appeal within the prescribed time. The delay of 148 days is therefore condoned. The appeal is admitted for adjudication on merits.

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the claim submitted copy of computation of income showing receipt of gift from brother Sri G Jagannath Babu out of the sale proceeds of agricultural land. The AO issued notices under section 142(1) of the Act requiring the assessee to furnished certain details and evidences such as name, PAN, email, bank statement of the person from whom gift was received. In addition, the AO required the assessee to furnish the nature of business activity and relationship with the person from whom gift was received. However, the assessee failed to file response. Hence, the AO treated the claim of receipt of gift for Rs. 36.62 lakh as unexplained cash credit under section 68 of the Act. Accordingly, the AO completed the assessment under section 143(3) of the Act vide order dated 1st December 2019 by making addition of Rs. 60,12,000/- (23.5 lakh + 36.62 Lakh) to the total income of the assessee.

5.1 The assessee preferred appeal before the learned CIT(A). However, the assessee appeal got dismissed by the learned CIT(A) vide order dated 6th December 2023 without going into merit for the reason that there was no reply and submission made by the assessee to notices issued.

5.2 On further appeal by the assessee before the Tribunal in ITA No. 189/Bang/2024. The Bench vide order dated 11th March 2024 set aside the order of the learned CIT(A) and restored the matter back to the file of the learned CIT(A) for fresh adjudication on merit.

5.3 During the set aside proceedings before the learned CIT(A), the assessee through the statement of facts and submission 24-05-2025 contended she has sold an agricultural land of her brother in

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representative capacity as on 20-07-2016 for a consideration of Rs. 1,36,62,000/- only. Out of total sales consideration, a sum of Rs. 1 crore was received in earlier year whereas reaming amount of Rs. 36,62,000/- was received as on 20-07-2016 in cash. The cash received as on 20-07- 2016 being sale proceeding of land was gifted to her by her brother. The said consideration was received in cash can be substantiated from page 5 of the sale deed. Furthermore, the assessee in support of her contention furnished an affidavit from the purchaser and from her brother. Accordingly, the assessee claimed that the cash deposit of Rs. 23.5 lakh during the demonetisation was out of the impugned receipt of Rs. 36,62,000/- only.

5.4 The assessee also claimed that the return filed for the immediately preceding assessment year 2016-17 was also selected for scrutiny for verification of cash deposit. During the assessment proceeding of A.Y. 2016-17 the assessee submitted the copy of impugned sale deed in response to notice issued u/s 142(1) in support of source of cash deposit. Thereafter, the assessment got completed vide order dated 24th December 2018 accepting the return income.

5.5 In the light of the above, the assessee prayed to the learned CIT(A) to delete the addition made by the AO under section 68 of the Act on account of cash deposit and receipt of gifts. However, the learned CIT(A) did not accept the submission made by the assessee and confirmed the addition made by the AO. The relevant observation of the learned CIT(A) is extracted as under: 6.5 With respect to the addition of Rs. 23,50,000/- on account of cash deposit during demonetization period u/s 68 of the Act in bank accounts held with Tamilnadu Mercantile Bank, Hosur Branch, State Bank of India, SPB Branch and addition of Rs.36,62,000/- on account of disallowance of exempt income claimed

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by the appellant treated as unexplained cash credit u/s 68 of the Act, the appellant has repeatedly claimed that the source of cash deposit of Rs. 23,50,000/- is from the gift of Rs. 36,62,000/- received from brother who received the proceeds of Rs. 1,38,00,000/- from sale of agricultural land in cash and such cash was deposited only due to compulsion of demonetisation. The appellant has filed the following documentary evidences to justify her stand as under: (i) Affidavit of brother Shri Jagadeeshbabu stating amount of Rs.36,62,000/- was given to her sister from the proceeds of sale of agricultural land. (ii) Affidavit of Purchaser of land from Shri Jagadeeshbabu stating about making payment of Rs. 1,38,00,000/- against the purchase of land. (iii) Copy of Sale deed dated 20.07.2016. 6.5.1 The documentary evidences furnished by the appellant have been verified. The appellant has claimed that the sale proceeds of the agricultural land was received in cash by her brother to the tune of Rs. 1,38,00,000/- and later out of Rs. 1,38,00,000/-, Rs. 36,62,000/- was gifted to the appellant as gift on 20.07.2016. The claim of the appellant regarding cash deposit of Rs. 23,50,000/- is from the cash of Rs. 36,62,000/- received from the brother as gift cannot be considered. It is a fact that demonetization was announced on 08.11.2016 whereas the appellant had accepted of receiving cash on 20.07.2016. There is no point of keeping such huge cash for a long period particularly when the appellant is two bank accounts in her name. 6.5.2 The gift of Rs. 36,62,000/- claimed to have been received in cash from her brother however, no copy of gift deed has been furnished by the appellant to justify the stand. Further, the appellant has not furnished any copy of bank statements to ascertain whether the exempt income claimed by the appellant of Rs. 36,62,000/-. Further, no details of capital account of Shri Jagdeeshbabu or details of bank statement of Shri Jagdeeshbabu (brother of the appellant) has been furnished by the appellant to establish the source of Rs. 36,62,000/-. 6.5.3 Since the documentary evidences furnished by the appellant before the appellate authority are not sufficient to establish the source of cash deposit of Rs. 23,50,000/- and exempt income claimed by the appellant of Rs. 36,62,000/- claimed to have been received as gift from her brother Shri Jagdeeshbabu an opportunity was provided to the appellant to furnish the following documents: (i) Copy of gift deed (ii) Copy of ITR and Copy of Capital A/c of Jagdeeshbabu along with all Annexure for A.Y. 2017-18 (iii) Copy of ITR and Details of Capital A/c of the appellant along with its all annexure. (iv) Copy of Bank Statement of Shri Jagdeeshbabu for F.Y. 2015-16 and F.Y. 2016-17 (v) Copy of Bank Statement of the appellant for F.Y. 2015-16 and F.Y. 2016-17 In response, the appellant has filed reply stating as under: **********************************************-- It is seen that for most of the documents sought during the appellate proceedings, the appellant has shown her inability to produce the documents and requested to close the query. The appellant has not furnished any details. It is seen that either the appellant does not have any legitimate documents or she does not want to produce these documents intentionally before the appellate authority to avoid any further investigation by the department. Moreover, affidavit filed by her brother regarding gift made to her cannot be relied upon as

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no such detail was filed before the AO and also no supporting proof along with affidavit has been furnished to authenticate the correctness and facts mentioned in the affidavit. In short, the reply submitted by the appellant is self serving, evasive and not supported with concrete documentary evidences and hence, cannot be relied upon. 6.5.4 The appellant has taken a stand that AO has not considered the assessment order copy provided for the previous assessment year (2016-2017) and later CIT (Appeals) has erred in not providing the reason why the findings in the assessment order for FY 2015-2016 (AY 2016-2017) shall not be considered. In this respect it is submitted that every assessment year is different from its previous or subsequent years. Res Judicata, is a legal principle that prevents the relitigation of a case that has already been decided by a court. However, as a general rule as settled by the Supreme Court in taxation matter, the principles of Res Judicata do not apply. In fact each assessment year is treated as a distinct unit and there is no bar on either the appellant or department from taking a different view of transaction in subsequent year/years. Therefore, this stand of the appellant does not have any merit. 6.5.5 Since the appellant has failed to provide the credible documentary evidences and failed to establish her claim regarding cash deposit of Rs. 23,50,000/- is part of gift received from her brother no question of double taxation arises in the case of the appellant. 6.5.6 The appellant has failed to establish the source of cash deposit of Rs. 23,50,000/- and subsequently failed to justify the claim of exemption of Rs. 36,62,000/-. In view of the above discussion the addition of Rs. 23,50,000/- and Rs. 36,62,000/- made by the AO is upheld. All the grounds of appeal filed along with form 35 dated 04.12.2019 and 22.04.2024 are dismissed. 7. In the result the appeal is treated as dismissed.

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the said gift and the department failed to bring any contrary material on record.

9.1 At the outset, we note that the learned CIT(A) has not disputed the basic factual foundation put forth by the assessee. The material available on record clearly demonstrates that the assessee’s brother Shri Jagadeeshbabu had sold agricultural land for a consideration of Rs. 1.38 crore vide sale deed dated 20.07.2016. The sale deed itself records receipt of sale consideration in cash. The assessee has also furnished affidavit of the purchaser affirming payment of sale consideration in cash to Shri Jagadeeshbabu. These documentary evidences were furnished before the learned CIT(A) and the learned CIT(A) has nowhere recorded any finding that the sale deed or affidavit of purchaser are false or fabricated. Thus, the fact regarding receipt of cash sale consideration from sale of

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agricultural land by assessee’s brother stands substantially established from independent documentary evidences available on record.

9.2 We further notice that the assessee consistently claimed that out of the aforesaid sale proceeds, a sum of Rs. 36,62,000/- received on 20.07.2016 was given to her by her brother as gift. In support of the same, affidavit of the brother was also furnished before the learned CIT(A). The claim of the assessee has been rejected mainly for the reason that gift deed, ITR, capital account and bank statement of the brother were not furnished. However, in our considered opinion, the authorities below have failed to appreciate the surrounding circumstances and preponderance of probabilities arising from the material already available on record i.e. sale of agricultural land. In the present case, substantive evidence demonstrating availability of cash in the hands of assessee’s brother is already on record through registered sale deed, recital regarding receipt of cash consideration and affidavit of purchaser. Once the source of cash in the hands of the donor stands substantially established and the brother has also affirmed by way of affidavit that the amount was gifted to the assessee, then merely because certain further supporting documents such as gift deed, ITR copy or capital account were not furnished, the entire claim cannot be rejected in absence of any contrary material brought by the Revenue.

9.3 It is also relevant to note that the Revenue has not conducted any independent enquiry either from the purchaser of land or from the assessee’s brother to disprove the evidences filed by the assessee. No material has been brought on record to show that the affidavits furnished before the learned CIT(A) were incorrect or false. In absence of rebuttal

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by the department, the evidentiary value of affidavits and registered sale deed cannot be brushed aside merely on suspicion and surmises.

9.4 We also find force in the contention of the assessee regarding consistency. The assessee has specifically brought on record that in the immediately preceding assessment year 2016-17, scrutiny assessment was completed after considering the very same sale transaction and related cash deposits arising from receipt of sale consideration of agricultural land by her brother. The substantial portion of consideration amounting to around Rs. 1 crore was received in earlier year and accepted by the department during scrutiny proceedings. The remaining amount of Rs. 36,62,000/- received during the year under consideration arises from the very same transaction. Though strictly speaking the principle of res judicata may not apply to income-tax proceedings, yet the principle of consistency certainly requires that when identical facts arising from same transaction have been accepted by the department in earlier year, a contrary view in subsequent year should not be taken without bringing any distinguishing feature or fresh adverse material on record. In the present case, no such distinguishing material has been brought by the Revenue. Accordingly, considering the totality of facts, surrounding circumstances, documentary evidences placed on record and applying the principle of preponderance of probabilities, we are of the considered view that the assessee has satisfactorily explained the receipt of Rs. 36,62,000/- from her brother out of sale proceeds of agricultural land. Therefore, the addition made under section 68 of the Act on this issue is directed to be deleted.

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Order pronounced in court on 21st day of May, 2026

Sd/- Sd/- (SOUNDARARAJAN K) (WASEEM AHMED) Judicial Member Accountant Member Bangalore Dated, 21st May, 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