SRIVARI ELITE MUTUALLY AIDED CO OP,TIRUPATI vs. ITO, WARD - 1(3), TIRUPATI

ITA 107/HYD/2026Status: DisposedITAT Hyderabad30 September 2026AY 2017-20189 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the Assessing Officer made the addition of Rs. 43,80,000/- based on AIR information, without verifying the assessee's bank account statements to ascertain the correct facts of cash deposits during the demonetization period. The assessee, however, submitted an application for admission of additional evidence, comprising bank account statements and details of the source of deposits, to demonstrate that the actual cash deposit was Rs. 7,74,000/-. The Tribunal found that these relevant records and details were not available before the lower authorities and required proper verification and examination. Therefore, in the interest of justice, the Tribunal set aside the matter to the Assessing Officer for fresh adjudication after verifying and examining the additional evidence filed by the assessee. The assessee was to be given a proper opportunity of hearing before passing a fresh order. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Srivari Elite Mutually Aided Co Op, is a mutually aided cooperative society. For Assessment Year 2017-2018, it filed a return declaring an income of Rs. 32,790/-. Its case was selected for scrutiny due to an 'abnormal increase in cash deposit during the demonetization period.' The Assessing Officer (AO), under Section 143(3) of the Income Tax Act, 1961, made an addition of Rs. 43,80,000/- under Section 68 as unexplained cash credit. The assessee's appeal to the CIT(A)-NFAC, Delhi, was unsuccessful. The assessee then appealed to the ITAT, Hyderabad. The assessee claimed the AO had used an incorrect figure for cash deposits, stating the actual deposit was Rs. 7,74,000/- across two bank accounts. The assessee sought to submit additional evidence, including bank statements, to support its claim.

What were the issues?

1. Whether the cash deposits in the bank accounts of the appellant represent the income of the appellant (Section 68 of the Income Tax Act, 1961)? 2. Whether the addition made by the Assessing Officer is factually incorrect due to the use of an erroneous amount of cash deposit? Assessee's Contentions: - The cash deposits do not represent the income of the appellant. - The appellant has been consistently engaged in the same business and offering income in past years, and the doctrine of consistency should apply. - The Assessment Order is factually incorrect as the addition is made solely based on cash deposits during the demonetization period. - The actual cash deposit in two bank accounts was Rs. 7,74,000/-, not Rs. 43,80,000/- as stated by the AO. - The AO made the addition based on incorrect AIR information. - The assessee could not submit all details and records before the AO and CIT(A) due to miscommunication and now seeks to admit additional evidence comprising bank account statements and details of members' contributions. - The assessee prays for remission to the AO for re-examination with additional evidence or deletion of the addition. Revenue's Contentions: - The assessee has not produced relevant details and supporting evidence to explain the source of cash deposits during the demonetization period. - The AO proceeded based on AIR information regarding large cash deposits during demonetization. - The revenue relied upon the orders of the authorities below.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD

Before: SHRI VIJAY PAL RAO

Pronounced: 30.09.2026

This appeal by the Assessee is directed against the Order dated 22.12.2025 of the learned CIT(A)-National Faceless Appeal Centre [in short "NFAC"], Delhi, for the assessment year 2017-2018. 2. The Assessee has raised the following grounds of appeal:

“The Order of the Ld. Commissioner of Income Tax, 1) (Appeals), National Faceless Appeal Centre (NFAC), Delhi, is erroneous and is not based on facts

The order continues below.

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