JAGANMOHAN REDDY GADDAM,MEDAK vs. ITO, WARD-1, SANGAREDDY

ITA 849/HYD/2026Status: DisposedITAT Hyderabad30 September 2026AY 2020-2112 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition made by the Assessing Officer and sustained by the CIT(A) was not justified and should be deleted. The Tribunal noted that the initial confirmation from K Ravi contained a typographical error in the PAN, where 'P' was mistakenly used instead of 'A' as the first alphabet. The assessee subsequently filed a revised confirmation with the correct PAN (AHAPK6016D) and a copy of the PAN itself. The Tribunal observed that the transactions were undisputedly conducted through banking channels, reflected in the bank accounts of both the assessee and the creditors. Therefore, once the loan transaction was through banking channels and the assessee provided a creditor confirmation with a valid PAN, the addition was unwarranted. The Tribunal allowed the appeal.

What were the facts?

The assessee, Jaganmohan Reddy Gaddam, is an individual deriving income from salary. For Assessment Year 2020-2021, he did not file a return of income. A notice under Section 148 was issued, and he subsequently filed a return declaring an income of Rs. 4,79,210/-. The Assessing Officer (AO) noted credits of Rs. 3,40,300/- in the assessee's bank account. The assessee explained these as loans taken from Sri K Ravi for house construction and provided a confirmation. However, the AO rejected the confirmation, stating the PAN provided for K Ravi was invalid. The Commissioner of Income Tax (Appeals) [CIT(A)] confirmed the addition. The assessee appealed to the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the addition of Rs. 3,40,300/- made by the Assessing Officer under Section 69A read with Section 115BBE of the Income-tax Act, 1961, and sustained by the CIT(A), is justified? Assessee's Contention: The assessee argued that the addition was erroneous. While there was a clerical mistake in the PAN of the lender, K Ravi, in the initial confirmation, a revised confirmation with the correct PAN was subsequently filed. The assessee contended that the transactions were through banking channels and the revised confirmation, along with the lender's PAN, established the identity, creditworthiness, and genuineness of the transaction, which were not considered by the lower authorities. Revenue's Contention: The revenue argued that the AO and CIT(A) correctly found that the assessee had not provided a valid confirmation from K Ravi. In the absence of verifiable supporting documentary evidence and proof of the creditor's creditworthiness, the AO was justified in making the addition.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 148,Section 271AAC(1)

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 20.01.2026 of the learned CIT(A)-National Faceless Appeal Centre [in short "NFAC"], Delhi, for the assessment year 2020-2021. 2. The Assessee has raised the following grounds of appeal:

1.

“The Order of the learned Commissioner of Income Tax (A), NFAC, Delhi is not correct either on facts or

The order continues below.

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