JAYASHREE POTHU,HYDERABAD vs. ITO, WARD- 14(1), HYDERABAD

ITA 2010/HYD/2025Status: DisposedITAT Hyderabad09 October 2026AY 2016-1715 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal decided the appeal by addressing the two grounds raised. Ground 1, concerning the validity of the Section 148 notice, was dismissed as not pressed by the assessee. For Ground 2, regarding the addition of Rs. 20,59,000/- as unexplained money, the Tribunal analyzed the bank statements of the assessee and her family members. The Tribunal found that the deposits into the assessee's joint bank account, from which the stamp duty was paid, were adequately explained by withdrawals from the bank accounts of her daughter and son on the same dates or closely thereafter. Specifically, Rs. 8 lakhs from the daughter on 03.07.2015, Rs. 4 lakhs and Rs. 1 lakh from the son on 12.08.2015 and 22.08.2015 respectively, and Rs. 5 lakhs transferred from the assessee's own SBI account on 17.12.2015 were all substantiated. Further, Rs. 8 lakhs deposited on 18.12.2015 was explained by withdrawals from the son's account (totaling Rs. 4,29,900/-) and the daughter's account (Rs. 4 lakhs). The remaining Rs. 1 lakh deposited on 09.02.2016 was partly explained by a withdrawal from the assessee's account (Rs. 50,000/-) and the balance from past savings (Rs. 50,000/-). The Tribunal concluded that the source of Rs. 20,59,000/- was proved by the assessee through documentary evidence, and thus, the addition made by the AO was deleted. The ratio decidendi is that when an assessee provides documentary evidence, such as bank statements, demonstrating the flow of funds from family members or personal accounts to explain deposits used for a specific expenditure, the onus to prove the source is discharged.

What were the facts?

The assessee, Jayashree Pothu, is an individual who filed a return of income for AY 2016-2017 declaring NIL income. The Assessing Officer (AO) initiated reassessment proceedings under Section 148 of the Income Tax Act, 1961, after receiving information that the assessee had paid stamp duty of Rs. 20,59,000/- for a plot allotted in 1989, with the sale deed executed in FY 2015-2016. The AO observed cash deposits in the assessee's joint bank account with her husband, from which the stamp duty was paid. The AO made an addition of Rs. 20,59,000/- as unexplained money under Section 69A. The assessee challenged this before the CIT(A), who confirmed the addition. The assessee then filed an appeal before the ITAT.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, is void, considering the income escaping assessment is below Rs. 50 lakhs and beyond the limitation period as per amended provisions (3 years prior to notice)? 2. Whether the addition of Rs. 20,59,000/- as unexplained money under Section 69A, made by the Assessing Officer and confirmed by the CIT(A), is justified on facts? Assessee's arguments: Regarding Issue 1: The assessee did not press this ground before the Tribunal. Regarding Issue 2: The assessee argued that the source of the stamp duty payment was explained by deposits in her bank account, which were received from her husband (Rs. 8 lakhs), daughter (Rs. 4 lakhs), and son (Rs. 9 lakhs), totaling Rs. 21 lakhs. She provided details of withdrawals from family members' accounts and deposits into her account, supported by bank statements, demonstrating a clear correlation and explaining the source of funds. The assessee contended that she had discharged her onus with documentary evidence. Revenue's arguments: Regarding Issue 1: The Revenue had no objection to the dismissal of this ground. Regarding Issue 2: The Revenue argued that the assessee failed to correlate one-to-one transactions of withdrawal and deposit, and the amounts did not match. Therefore, the assessee failed to explain the source of the deposit to the satisfaction of the AO with documentary evidence, relying on the orders of the authorities below.

Which sections of the Income-tax Act were involved?

Section 148,Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD

Before: SHRI VIJAY PAL RAO

Pronounced: 09.10.2026

PER VIJAY PAL RAO, VICE PRE IENT:

This appeal by the Assessee is directed against the Order dated 30.09.2025 of the learned CIT(A)-National Faceless Appeal Centre [in short "NFAC"], Delhi, for the assessment year 2016-2017. 2. The Assessee has raised the following grounds of appeal:

1) “The order of the Appellate Commissioner is contrary to law, facts and circumstances of the case. 2) The initial notices including the notice issued u/s.148 is void, as the income escaping tax is below Rs.50 lakhs and is beyond the lim

The order continues below.

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