SREEDHAR REDDY KOMALLA,HYDERABAD vs. ITO, WARD-16(3), HYDERABAD

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ITA 8/HYD/2026Status: DisposedITAT Hyderabad14 October 2026AY 2018-197 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal acknowledged that the AO made an addition of Rs. 2,79,92,816/- under section 68 for unexplained unsecured loans due to the assessee's failure to establish the identity, creditworthiness of lenders, and genuineness of transactions. It was also noted that the assessee remained non-compliant before both the AO and the CIT(A), despite opportunities and notices. However, considering the nature of the addition and in the interest of justice, the Tribunal decided to grant one more opportunity to the assessee to substantiate their claim. The order of the CIT(A) was set aside, and the matter was restored to the file of the AO for fresh adjudication on merits. The AO was directed to reconsider the issue after providing a reasonable opportunity of being heard. The assessee was directed to pay a nominal cost of Rs. 5,000/- to the ITAT Bar Association, Hyderabad, for repeated non-compliance. The assessee was also directed to file all relevant details and evidence as called for by the AO.

What were the facts?

The assessee, Sreedhar Reddy Komalla, an individual engaged in the broadcasting industry, filed a return of income declaring NIL income for Assessment Year 2018-19. The case was selected for limited scrutiny concerning TDS defaults, unsecured loans, and business expenses. During assessment, the Assessing Officer (AO) issued notices under sections 143(2) and 142(1). While partial details were furnished, complete evidence for unsecured loans was not provided. Consequently, the AO completed the assessment under section 143(3) r.w.s. 144B, making an addition of Rs. 2,79,92,816/- under section 68 for unexplained unsecured loans. The assessee appealed to the CIT(A), who issued notices but received no response or adjournment requests. The CIT(A) dismissed the appeal. The assessee then appealed to the ITAT.

What were the issues?

1. Whether the addition of Rs. 2,79,92,816/- made by the AO under section 68 of the Income-tax Act, 1961, towards unexplained unsecured loans is justified, considering the assessee's failure to furnish complete details and confirmations from lenders? (Question of law and fact) Assessee's Contention: The AO made the addition without properly appreciating the details furnished, including party-wise information, ledger copies, and confirmations. The assessee could not provide complete confirmations from all individual lenders due to their scattered locations and sought one more opportunity to furnish necessary details and evidence. The assessee argued for the matter to be restored to the AO for fresh adjudication. Revenue's Contention: The Revenue supported the orders of the lower authorities, stating that despite several opportunities, the assessee failed to furnish necessary details to establish the identity, creditworthiness of lenders, and genuineness of transactions. The assessee also failed to respond to notices issued by the CIT(A). The Revenue submitted that the issue should be decided based on available facts and material.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(2),Section 142(1),Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad “A” Bench, Hyderabad

आदेश / ORDER PER MANJUNATHA G., A.M :

This appeal filed by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [in short “NFAC”], Delhi, dated 12.11.2025, pertaining to the assessment year 2018-19.

2.

The brief facts of the case are that, the assessee is an individual engaged in the broadcasting industry. For the A.Y. 2018-19, the assessee filed his return of income declaring NIL income. The case was selected for limited scrutiny to verify the issues relating to default in TDS and disallowance for such default, unsecured loans and business expenses. During the course of assessment proceedings, the A.O. issued notices u/s 143(2) and 142(1) of the Income-tax Act, 1961, calling for details and evidences in support of the return filed. Although the assessee furnished partial details, he failed to furnish the complete details and evidences in support of unsecured loans. Accordingly, the A.O. completed the assessment u/s 143(3) r.w.s. 144B of the Act, vide order dated 16.09.2021, and made an

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addition of Rs.2,79,92,816/- u/s 68 of the Act towards unexplained unsecured loans.

3.

Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee challenged the addition made by the A.O. u/s 68 of the Act, towards unexplained unsecured loans. During the course of appellate proceedings, the Ld. CIT(A) issued notices on various dates, providing opportunities to the assessee to furnish submissions and supporting evidences in support of the grounds of appeal. However, there was no response from the assessee to the notices issued, nor was any adjournment sought. The Ld. CIT(A), after considering the facts available on record and the reasons recorded by the A.O. for making the addition, dismissed the appeal filed by the assessee.

4.

Aggrieved with the order of Ld. CIT(A), the assessee is now in appeal before the Tribunal.

5.

The learned counsel for the assessee, Shri M.V. Prasad, C.A., submitted that, the A.O. made an addition of Rs.2,79,92,816/- u/s 68 of the Act towards unexplained unsecured loans. He

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further submitted that, the assessee had furnished details relating to the unsecured loans, including party-wise and ledger copies and confirmations from the lenders, and that the loans were received from individual lenders. However, the A.O. made the addition without properly appreciating the submissions of the assessee. He further submitted that, the assessee could not furnish complete confirmations from all the lenders, as they were individuals scattered at different places. He submitted that, the assessee requires one more opportunity to furnish the necessary details and evidences in support of the unsecured loans. However, there was no compliance before the Ld. CIT(A) during the appellate proceedings. Therefore, he prayed that the orders of the lower authorities may be set aside and the matter may be restored to the file of the A.O. for fresh adjudication after providing one more opportunity to the assessee.

6.

The learned Sr. A.R. for the Revenue, Shri Mohan Babu, on the other hand, supporting the orders of the lower authorities submitted that, despite providing several opportunities, the assessee failed to furnish the necessary details and evidences to establish the identity and creditworthiness of the lenders and the

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genuineness of the transactions. He further submitted that, the assessee also failed to respond to the notices issued by the Ld. CIT(A) during the appellate proceedings. Therefore, he submitted that the orders passed by the lower authorities may be upheld. However, the issue may be decided in accordance with law on the basis of facts and material available on record.

7.

We have heard both parties, perused the material available on record and had gone through the orders of the authorities below. There is no dispute with regard to the fact that, the A.O. completed the assessment u/s 143(3) r.w.s. 144B of the Act, and made an addition of Rs.2,79,92,816/- u/s 68 of the Act, towards unexplained unsecured loans, on the ground that the assessee failed to furnish the necessary details and evidences to establish the identity and creditworthiness of the lenders and the genuineness of the transactions. We further find that, although the assessee preferred an appeal before the Ld. CIT(A), there was no compliance on the part of the assessee despite issuance of notices on various dates and the Ld. CIT(A) dismissed the appeal after considering the material available on record. Thus, it is evident that, the assessee remained non-compliant both before the

6 ITA No.8/Hyd/2026

A.O. and the Ld. CIT(A). However, considering the nature of the addition made and in the interests of justice, we are of the considered view that, one more opportunity may be provided to the assessee to substantiate his claim by furnishing the necessary details and evidences in support of the unsecured loans. Accordingly, we set aside the order of the Ld. CIT(A) and restore the matter to the file of the A.O. for fresh adjudication on merits. The A.O. is directed to reconsider the issue afresh after providing reasonable opportunity of being heard to the assessee. The assessee is also directed to pay a nominal cost of Rs.5,000/- (Rupees Five Thousand only) for his repeated non-compliance before the lower authorities. Such cost shall be paid to the ITAT Bar Association, Hyderabad, within 15 days from the date of receipt of this order, and proof of such payment shall be produced before the Registry. Needless to say, the assessee shall file the relevant details and evidences as called for by the A.O. during the course of assessment proceedings. We order accordingly.

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8.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the Open Court on 14th October, 2026.

Sd/- Sd/- श्री विजय पाल राव (मंजूनाथ जी) (VIJAY PAL RAO) (MANJUNATHA G.) उपाध्यक्ष /VICE PRESIDENT लेखा सदस्य/ACCOUNTANT MEMBER

Hyderabad, dated 14.10.2026. TYNM/sps आदेशकी प्रतिलिपि अग्रेषित/ Copy of the order forwarded to:- 1. निर्धारिती/The Assessee : SREEDHAR REDDY KOMALLA, 10-2-289/50/103, SHANTHI NAGAR, HYDERABAD-500028, TELANGANA 2. राजस्व/ The Revenue : ITO, WARD-16(3), O/O ITO, WARD-16(3), I T TOWERS, MASAB TANK, HYDERABAD-500004, TELANGANA 3. The Principal Commissioner of Income Tax, Hyderabad. विभागीयप्रतिनिधि, आयकर अपीलीय अधिकरण, हैदराबाद / DR, ITAT, Hyderabad 4. गार्डफ़ाईल / Guard file 5.

आदेशानुसार / BY ORDER Digitally signed by TIRUPATI TIRUPATI YAMINI YAMINI NAGA MALLESWARI NAGA MALLESWARI Date: 2026.10.14 13:16:32 +05'30' Senior Private Secretary, ITAT, Hyderabad.

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