SUDHAKARAN,SALEM vs. DCIT, CIRCLE-1(1), SALEM

ITA 1420/CHNY/2026Status: DisposedITAT Chennai05 October 2026AY 2017-186 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the cash deposits of Rs. 70,82,000/- made by the assessee, recovered from sundry debtors, were explained. The Tribunal found that the loans were sourced from identifiable sources, namely additional income offered during a survey and a loan from Bajaj Finance, and were duly recorded in the audited financials and the ROI for AY 2016-17. The Tribunal noted that the AO had not disturbed the interest income offered on these advances in AY 2016-17. It was also acknowledged that obtaining confirmation letters for cash repayments from debtors is not feasible. Therefore, the Tribunal concluded that the addition made by the AO and sustained by the CIT(A) was unwarranted. The Tribunal directed the AO to delete the addition of Rs. 70,82,000/- made under Section 69A read with Section 115BBE of the Act, allowing the grounds of appeal raised by the assessee. No issue was expressly left undecided.

What were the facts?

The assessee, an individual doctor, filed an appeal against the order of the CIT(A) confirming an addition of Rs. 70,82,200/- made by the AO. The addition was for cash deposits treated as unexplained money under Section 69A read with Section 115BBE of the Income Tax Act, 1961, for Assessment Year 2017-18. The AO had initiated scrutiny under CASS to examine cash deposits and depreciation. The assessee's explanation that the cash represented realization of loans advanced in earlier years was not accepted by the AO and subsequently by the CIT(A). The appeal was filed with a delay of 72 days, which the Tribunal condoned.

What were the issues?

1. Whether the cash deposits of Rs. 70,82,000/- made by the assessee in the bank account for AY 2017-18 are unexplained money under Section 69A read with Section 115BBE of the Act? Assessee's Contentions: - The cash represents a part of outstanding loans realized from advances made in earlier years. - The source for these advances was additional income offered during a survey in AY 2010-11 to 2012-13 and a loan of Rs. 2,00,00,000/- from Bajaj Finance in FY 2014-15. - These advances were recorded as 'Advances recoverable in cash or in kind or for value to be received' in the ROI for AY 2016-17 and audited financials. - Interest income on these advances was offered in AY 2016-17. - It is not feasible to obtain confirmation letters for cash repayments from debtors. Revenue's Contentions: - The assessee changed stance regarding the source of loans (survey income vs. Bajaj Finance loan). - The assessee did not produce details of debtors from whom money was recovered during assessment or appellate proceedings.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 143(3),Section 143(2),Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI

Before: SHRI MANU KUMAR GIRI & SHRI S. R. RAGHUNATHA

For Respondent: Shri. E.Elango, JCIT
Hearing: 11.08.2026Pronounced: 05.10.2026

PER S. R. RAGHUNATHA, AM : The Present appeal has been preferred by the Assessee against the order of the Learned Commissioner of Income Tax (Appeals), NFAC, Delhi [hereinafter referred to as Ld. CIT(A)] dated 24.10.2025, whereby the addition of cash deposits of Rs.70,82,200/- made in the assessment order passed by the Deputy Commissioner of Income Tax, Circle 1(1), Salem (in short “the AO”)

:-2-: ITA. No.1

The order continues below.

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