VEERA MANI KUMAR VATTI KOOTI,HYDERABAD vs. ITO, WARD -11(1), HYDERABAD

ITA 1069/HYD/2026Status: DisposedITAT Hyderabad09 October 2026AY 2016-1713 pages
AI SummaryPartly Allowed

What were the facts?

The assessee, Shri Veera Mani Kumar Vatti Kooti, is an individual who did not file a return of income for Assessment Year 2016-17. The Assessing Officer (AO) initiated reassessment proceedings under section 147 based on information about cash deposits and time deposits. The AO completed the assessment under section 147 read with sections 144 and 144B, making additions under section 69A for unexplained money, disallowing deductions under Chapter VI-A, and adding capital gains. The total assessed income was Rs. 87,48,034/-. The assessee appealed to the CIT(A), who partly allowed the appeal. The assessee has filed two appeals (ITA Nos. 1069 & 1218 of 2026) before the ITAT, Hyderabad Bench, against the orders of the CIT(A) dated 29.01.2026 and 11.02.2026.

What did the Tribunal hold?

Regarding the additions of Rs. 1,38,000/- and Rs. 1,20,250/- (Issue 1), the Tribunal held that these amounts were received through banking channels from lessees of the assessee's agricultural land as his share of sale proceeds. The Tribunal found that the assessee's ownership of agricultural land, the agricultural operations, and the banking receipts explained the source of these funds. No contrary material was presented by the revenue. Therefore, the Tribunal directed the AO to delete these additions. Regarding the addition of Rs. 3,00,000/- (Issue 2), the Tribunal held that the assessee had identified the lender and provided a bank statement and lender's confirmation. The AO failed to conduct necessary verification or present contrary material. The Tribunal found the explanation, supported by documentary evidence and the absence of rebuttal, to be sustainable and directed the deletion of this addition. Regarding the penalty of Rs. 20,94,000/- under section 271D (Issue 3), the Tribunal noted the assessee's consistent denial of receiving cash and the explanation that the amount was included in the sale deed to match stamp duty value, supported by the son-in-law's affidavit. Considering the cumulative circumstances, including the close family relationship, the assessee's advanced age, the denial of cash receipt, the explanation regarding stamp duty value, the supporting affidavit, and the AO's failure to examine the son-in-law, the Tribunal was satisfied that the assessee had established a reasonable cause under section 273B. Accordingly, the penalty was set aside.

What were the issues?

1. Whether the addition of Rs. 1,38,000/- and Rs. 1,20,250/- under section 69A, treating claimed agricultural income as unexplained money, is justified? - Assessee's contention: The amounts represent the assessee's one-third share of sale proceeds from agricultural produce, received through banking channels from lessees of his agricultural land. The AO failed to consider the land ownership, agricultural operations, and banking receipts. - Revenue's contention: Relied on the orders of the lower authorities. 2. Whether the addition of Rs. 3,00,000/- under section 69A, in respect of a loan, is justified? - Assessee's contention: The amount is a loan received from Mr. Venkata Ramana Babu through banking channels, supported by bank statements and the lender's confirmation. The AO made the addition without cross-verification. - Revenue's contention: Relied on the orders of the lower authorities. 3. Whether the penalty of Rs. 20,94,000/- levied under section 271D is sustainable, given the recital of cash receipt in a sale deed? - Assessee's contention: The cash amount mentioned in the sale deed was not actually received; it was included by the advocate to match the stamp duty value. The transaction was between close family members (assessee and son-in-law) and there was a reasonable cause under section 273B for the failure. An affidavit from the son-in-law supports this. - Revenue's contention: Relied on the orders of the lower authorities and supported the penalty levy.

Which sections of the Income-tax Act were involved?

Section 139,Section 147,Section 148A,Section 148,Section 144,Section 144B,Section 69A,Section 153A,Section 271D,Section 273B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘B‘ Bench, Hyderabad

Before: Shri Sanjay GargShri Madhusudan Sawdia

Hearing: 06/10/2026

Per Madhusudhan Sawdia, A.M.: These two appeals are filed by Shri Veera Mani Kumar Vatti Kooti (“the assessee”), feeling aggrieved by the separate orders passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC)

Delhi (“Ld. CIT(A)”) dated 29.01.2026 & 11.02.2026 for the A.Y. 2016-17. Since both the appeals relates to the same assessee for same A.Y., for the sake of convenience, these appeals were heard together and are being disposed of

The order continues below.

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