GUDE VENKATESWARA RAO,KANCHIKACHERLA vs. THE INCOME TAX OFFICER, WARD-1(1), VIJAYAWADA

ITA 57/VIZ/2026Status: DisposedITAT Visakhapatnam09 October 2026AY 2023-249 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the assessee's appeal, deleting the additions sustained by the CIT(A). Regarding the loan from Mrs. Allam Haritha, the Tribunal noted that the source of the Rs. 8 lakhs received during the year was from the repayment of a previous loan, and the creditworthiness of the creditor was accepted in an earlier year. For the amount from Mr. Angadala Venkata Rao, the Tribunal found it was an advance against the sale of a vehicle, with transactions conducted through banking channels and confirmed by parties. For the loan from Mr. Allam Venkata Reddy, the Tribunal found that the assessee had established identity, genuineness, and creditworthiness through filed evidence, citing CIT v. Lovely Exports (P) Ltd. The Tribunal also found that the identity, genuineness, and creditworthiness of the loan creditors who were the assessee's children (Mr. Gude Ganesh Satya, Mrs. Gude Sravani, and Mrs. Gude Tulasi) were satisfactorily proved through detailed evidence, including bank statements and explanations of the source of funds (e.g., gold loans from cooperative banks). Therefore, the Tribunal directed the deletion of all additions sustained by the CIT(A).

What were the facts?

The assessee, Gude Venkateswara Rao, filed his return for AY 2023-24 declaring income of Rs. 90,01,850/-. The Assessing Officer (AO) selected the case for scrutiny and noticed unsecured loans shown as of March 31, 2023. The assessee provided confirmations, ledger accounts, and bank statements for these loans. However, the AO found that the assessee failed to furnish PAN, email ID, ITR copies, and bank statements for some creditors, thus failing to establish their identity, genuineness, and creditworthiness. Consequently, the AO made an addition of Rs. 2,41,74,095/- under Section 68 as unexplained cash credit. The assessee appealed to the CIT(A), who partly allowed the appeal, deleting additions of Rs. 42,06,000/- (Mrs. Gude Parvathi), Rs. 32,00,000/- (Mr. Koritala Hanumantha Rao), and Rs. 4,47,173/- (Mrs. P. Naga Sunitha). The CIT(A) confirmed the remaining additions.

What were the issues?

1. Whether the addition made by the AO and sustained by the CIT(A) towards unsecured loans from various parties is justified, considering the evidence filed by the assessee to establish the identity, genuineness, and creditworthiness of the creditors, under Section 68 of the Income Tax Act, 1961? Assessee's contentions: The assessee argued that all necessary evidence, including confirmation letters, bank statements, and ITR copies, were filed for all loan creditors. Three of the creditors (Mr. Gude Ganesh Satya, Mrs. Gude Sravani, and Mrs. Gude Tulasi) are the assessee's children. Loans were received through banking channels, and the creditors had sufficient sources of income. The transaction with Mr. Angadala Venkata Rao was an advance against the sale of a vehicle, not a loan. The assessee relied on the principle that once identity, genuineness, and creditworthiness are established, the sum cannot be treated as income. Revenue's contentions: The Revenue supported the CIT(A)'s order, arguing that the assessee failed to prove the genuineness and identity of loan creditors and their creditworthiness. Merely furnishing confirmations and bank statements is insufficient; creditworthiness must be established, which the assessee failed to do to the satisfaction of the AO and CIT(A).

Which sections of the Income-tax Act were involved?

Section 68

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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH,

Before: SHRI VIJAY PAL RAO, HON’BLE & SHRI MANJUNATHA.G, HON’BLE

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 21.11.2025, and pertains to assessment year 2023-

24.

ITA 57/VI

The order continues below.

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