NAGALAKSHMI KAREDLA,MYLAVARAM vs. ITO, WARD 3(5),, VIJAYAWADA

ITA 181/VIZ/2026Status: DisposedITAT Visakhapatnam09 October 2026AY 2017-186 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal partly allowed the assessee's appeal. Regarding cash deposits of Rs. 7 lakhs on 16.09.2016, the Tribunal found that the assessee had sufficient source from a cash withdrawal of Rs. 2 lakhs on 29.08.2016 and sale of her agricultural land for Rs. 5.10 lakhs on 15.09.2016. Therefore, the addition of Rs. 7 lakhs was directed to be deleted. For cash deposits of Rs. 10 lakhs on 12.11.2016, the Tribunal held that Rs. 7 lakhs could be explained by previous cash withdrawals on 16.09.2016. The addition was directed to be deleted to this extent. However, for the balance Rs. 3 lakhs of these deposits, no explanation was offered, so the addition was sustained. In total, Rs. 14 lakhs of the Rs. 17 lakhs addition were deleted, and Rs. 3 lakhs were confirmed. Concerning the levy of tax under Section 115BBE, the Tribunal followed the Rajasthan High Court's decision in Deepak Maratha, holding that the amendment to Section 115BBE is applicable from AY 2018-19 onwards. Thus, the AO was directed to compute tax at the normal rate of 30% for AY 2017-18 on the confirmed addition.

What were the facts?

The assessee, Nagalakshmi Karedla, failed to file her Income Tax Return for Assessment Year (AY) 2017-18. The Assessing Officer (AO) noted cash deposits of Rs. 19 lakhs in her bank account. As the assessee did not comply with a notice under Section 142(1), the AO passed a best judgment assessment order under Section 144, adding Rs. 19 lakhs as income. The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], who neither appeared nor filed submissions. The CIT(A) partly allowed the appeal, reducing the addition by Rs. 2 lakhs and sustaining Rs. 17 lakhs. The assessee is now appealing this order before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the addition of Rs. 17 lakhs made by the AO and sustained by the CIT(A) towards cash deposits is justified, considering the assessee's explanation of the source of funds from agricultural land sale and previous cash withdrawals? (Question of law and fact, concerning Section 69A and Section 144 of the Income Tax Act, 1961). Assessee's Contention: The assessee argued that the cash deposits were out of the sale of agricultural land by herself and her husband, and also from previous cash withdrawals. The authorities ignored these explanations, citing a time gap between the land sale and deposits. The assessee relied on the decision in Deepak Maratha v. UoI. Revenue's Contention: The revenue supported the CIT(A)'s order, arguing that the assessee failed to establish a link between the cash deposits and the sale of agricultural land, or between previous withdrawals and subsequent deposits, due to a significant time gap. The revenue contended that the AO rightly made the addition, and the CIT(A) correctly allowed partial relief.

Which sections of the Income-tax Act were involved?

Section 139(1),Section 142(1),Section 144,Section 69A,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH,

Before: SHRI VIJAY PAL RAO & SHRI MANJUNATHA G

PER MANJUNATHA. G, AM: This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 15.12.2025, and pertains to assessment year 2017-

18.

ITA 181/VIZ/2026 NAGALAKSHMI KAREDLA

2.

The brief facts of the case are that the assessee, an individual not fi

The order continues below.

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