SREE GAYATHRI BRAHMANA MUTUALLY AIDED CO OPERATIVE SOCIETY LTD,ADONI vs. INCOME TAX OFFICER, WARD - 1, ADONI

ITA 2070/HYD/2026Status: DisposedITAT Hyderabad16 October 2026AY 2017-1814 pages
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What did the Tribunal hold?

The Tribunal decided to set aside the order of the CIT(A) on the first issue concerning the addition of Rs.39,99,555/- under section 69A and restored the matter to the AO for fresh adjudication. The AO was directed to examine the confirmations and affidavits of the 21 persons, verify the claimed discrepancy with bank certificates, and conduct further necessary verification. The Tribunal expressed no opinion on the merits of the addition. This ground was allowed for statistical purposes. Regarding the second issue of addition of Rs.35,66,504/- on differential turnover, the Tribunal found that the assessee's submission regarding the incorrect amount considered by the AO required factual verification. Therefore, this issue was also set aside and restored to the AO for fresh adjudication, allowing the grounds for statistical purposes. On the third issue, concerning the applicability of the enhanced tax rate under section 115BBE, the Tribunal, following its own decision in Soma Shekhar Bingumalla vs. ITO (ITA No. 76/Hyd/2026) and respectfully following the Rajasthan High Court's view in Deepak Maratha vs. Union of India, held that the enhanced rate of 60% is not applicable for AY 2017-18. The AO was directed to compute tax liability at the unamended rate. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Sree Gayathri Brahmana Mutually Aided Cooperative Society Ltd, filed its return for AY 2017-18 declaring Rs.37,050/-. The Assessing Officer (AO) selected the case for scrutiny and made additions. The AO treated Rs.39,99,555/- as unexplained money under section 69A for cash deposits during demonetisation, after allowing for closing cash balance. Additionally, the AO made an addition of Rs.35,66,504/- under 'Income from other sources', estimating income at 8% on a differential turnover of Rs.4,85,80,856/-. The AO completed the assessment under section 143(3) on 23.12.2019, determining total income at Rs.76,03,109/-. The assessee's appeal to the CIT(A) was dismissed, sustaining the additions. The assessee is now in appeal before the ITAT.

What were the issues?

1. Whether the addition of Rs.39,99,555/- under section 69A of the Income Tax Act, 1961, in respect of cash deposits during the demonetisation period is justified, considering the confirmations and affidavits filed by the assessee and a discrepancy in the amount of cash deposits certified by the bank? - Assessee's contention: The assessee argued that cash was received from 21 persons and provided confirmations/affidavits before the CIT(A) which were not considered. It also pointed out a discrepancy between the AO's figure and the bank's certificate regarding cash deposits. The assessee sought deletion of the addition. - Revenue's contention: The revenue supported the lower authorities' orders, arguing that a cooperative society cannot receive cash from non-members and carry on parallel banking. 2. Whether the addition of Rs.35,66,504/- under the head 'Income from other sources', estimated at 8% on the differential turnover, is justified? - Assessee's contention: The assessee contended that the amount considered by the AO was incorrect and referred to a summary of transactions in bank accounts. - Revenue's contention: Not recorded. 3. Whether the enhanced tax rate of 60% under section 115BBE of the Act is applicable for AY 2017-18? - Assessee's contention: The assessee challenged the levy of tax at 60% under section 115BBE, arguing it should be 30% for AY 2017-18, as the amendment enhancing the rate is prospective. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 69A,Section 143(3),Section 115BBE

AI-generated summary — verify with the full judgment below

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

Before: Shri Vijay Pal Rao, Vice-Shri Madhusudan Sawdia

Hearing: 03/09/2026

Per Madhusudhan Sawdia, A.M.: This appeal is filed by Sree Gayathri Brahmana Mutually Aided Cooperative Society Ltd (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi (“Ld. CIT(A)”) dated 29.04.2026 for the A.Y. 2017-18. ITA No 2070 of 2026 Sree Gayathri Brahmana Mutually Aided

2.

The assessee has raised the following grounds of appeal:

The order continues below.

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