ALTAF ALI BAIG MOGHAL,PRAKASAM vs. ITO, WARD-1, CHIRALA

ITA 1228/HYD/2026Status: DisposedITAT Hyderabad30 September 2026AY 2021-229 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the appeal. The Tribunal noted that the AO had made an addition of Rs. 32,50,000/-. However, during remand proceedings, the AO verified sale deeds confirming the sale of agricultural land for an aggregate consideration of Rs. 18,53,000/-. The AO also recorded that Rs. 32,50,000/- shown in the return was a clerical error and the actual sale consideration was Rs. 18,53,000/-. The land was confirmed to be rural agricultural land, and capital gains were exempt. The bank account verification showed deposits totaling Rs. 20,85,000/-, which the assessee explained as Rs. 18,53,000/- from sale proceeds and Rs. 2,32,000/- as agricultural income. The Tribunal observed that the AO had wrongly considered the maturity of a fixed deposit as a fresh deposit, leading to an inflated figure. The CIT(A) had accepted the sale consideration and agricultural income totaling Rs. 20,85,000/- but sustained an addition of Rs. 11,65,000/-. The Tribunal held that since the AO wrongly considered the total deposit amount by including the encashment of the fixed deposit, the addition sustained by the CIT(A) was contrary to the facts and record and therefore deleted.

What were the facts?

The assessee, Altaf Ali Baig Moghal, a 24-year-old student with no independent source of income, appealed an order by the CIT(A)-NFAC, Delhi for Assessment Year 2021-2022. The appeal challenged the CIT(A)'s confirmation of an addition of Rs. 20,85,000/- made by the Assessing Officer (AO) under Section 69A for alleged unexplained cash deposits. The assessee contended that these deposits arose from the sale proceeds of agricultural land, received through registered sale transactions totaling Rs. 18,53,000/-, and an additional Rs. 2,32,000/- as agricultural income. The AO initially made an addition of Rs. 32,50,000/-, which was later reduced by the CIT(A) to Rs. 11,65,000/-. The assessee argued that the AO and CIT(A) erred in considering the maturity of fixed deposits as fresh cash deposits.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the learned CIT(A) erred in confirming the addition of Rs. 11,65,000/- on account of alleged unexplained cash deposits in the bank account, contrary to the evidence and settled legal principles, including the ratio laid down in CIT vs. P.K. Noorjahan (SC)? Assessee's Contention: The impugned cash deposits were duly explained as arising from the sale proceeds of agricultural land (Rs. 18,53,000/-) and agricultural income (Rs. 2,32,000/-), totaling Rs. 20,85,000/-. The assessee, being a student, had no other source. The AO wrongly considered the maturity of fixed deposits as fresh deposits, leading to an inflated total deposit figure of Rs. 32,50,000/-. The addition sustained by the CIT(A) is therefore arbitrary and unjustified. Revenue's Contention: No documentary evidence was submitted before the AO to explain the source of the deposit, and the assessee failed to establish a direct correlation between the sale consideration of land and the bank deposits. The revenue relied on the orders of the authorities below.

Which sections of the Income-tax Act were involved?

Section 69A,Section 250,Section 143(3)

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 of the learned CIT(A)-National Faceless Appeal Centre [in short "NFAC"], Delhi for the Assessment Year 2021-2022. 2. The Assessee has raised the following grounds of appeal:

1.

“That, on the facts and in the circumstances of the case, the order passed by the Ld. CIT(A) u/s. 250 dt.25.02.2026, partly sustaining the assessment made u/s. 143(3), is erroneous to the extent, it upholds an addition o

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 69A

All 15,297 judgments and leading authorities on Section 69A →

Recent GST High Court judgments

Search GST case law →