SAJI KOPA JOHN,RANGA REDDY vs. DCIT CENTRAL CIRCLE-3(3), HYD, HYDERABAD

PDF · subscribers
ITA 1553/HYD/2025Status: DisposedITAT Hyderabad04 November 2026AY 2023-2411 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the Assessing Officer made additions of Rs. 30 lakhs and Rs. 3,46,738/- due to a lack of valid explanation and supporting documentary evidence. The CIT(A) confirmed these additions. The assessee has now filed additional evidence, including sale deeds, transfer certificates, MOUs for property purchases, and an affidavit from B. Raju, to explain the Rs. 30 lakh withdrawal. The assessee also provided a confirmation letter from Great Commission Foundation Inc. regarding the USD 4243 advance for travel. The Tribunal found that these documents, including sale deeds and MOUs, require verification and examination concerning the source of the Rs. 30 lakhs. Similarly, the foreign currency advance needs verification from relevant records and the confirmation letter. In the interest of justice, the Tribunal set aside the CIT(A)'s order and remanded the matter to the Assessing Officer for fresh adjudication after verifying and examining the additional evidence. The assessee will be given an opportunity of hearing before the AO passes a fresh order. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Saji Kopa John, filed an appeal against the order of the CIT(A)-11, Hyderabad, for Assessment Year 2023-2024. The appeal challenges the confirmation of additions made by the Assessing Officer (AO). The additions pertain to Rs. 30 lakhs in cash and USD 4243 (valued at Rs. 3,46,738/-) in foreign currency, both found during a search and seizure operation. The AO treated these as unexplained money under Section 69A of the Income Tax Act. The assessee contended that the Rs. 30 lakhs was withdrawn in 2021 for property registration expenses, which were delayed, and the foreign currency was an advance from Great Commission Foundation Inc. for travel expenses. The CIT(A) had confirmed the additions for lack of supporting evidence.

What were the issues?

1. Whether the addition of Rs. 30 lakhs as unexplained money under Section 69A of the Income Tax Act, 1961, is justified, considering the assessee's explanation of withdrawal for property purchase and subsequent submission of sale deeds and related documents. - Assessee's contention: The amount was withdrawn from the bank in 2021 for property registration, which was delayed. The property was eventually purchased in 2023-2025. The source of withdrawal is explained, and the purpose is now evidenced by sale deeds, transfer certificates, MOUs, and an affidavit from B. Raju. The delay in producing evidence was due to the delayed property transactions. - Revenue's contention: The assessee failed to provide supporting evidence before the AO and CIT(A) despite opportunities. The additional evidence now filed should not be admitted due to the lack of explanation for its prior non-production. 2. Whether the addition of USD 4243 (Rs. 3,46,738/-) as unexplained money under Section 69A of the Income Tax Act, 1961, is justified, given the confirmation letter from Great Commission Foundation Inc. stating it was for travel expenses. - Assessee's contention: The foreign currency was an advance from the Great Commission Foundation Inc. for the assessee's travel to the USA in April-May 2023. This is supported by a confirmation letter from the foundation and details of foreign travel from the assessee's passport. - Revenue's contention: Not explicitly recorded, but implied by the confirmation of the AO's addition, suggesting the explanation was not satisfactory to the lower authorities.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD

Before: SHRI VIJAY PAL RAO & SHRI MANJUNATHA G.

Pronounced: 04.11.2026

आदेश / ORDER

PER VIJAY PAL RAO, VICE PRESIDENT:

This appeal by the assessee is directed against the Order dated 21.07.2025 of the learned CIT(A)-11, Hyderabad, for the assessment year 2023-2024.

2.

The assessee has raised the following grounds of appeal:

“The Ld. CIT Appeals erred in confirming the additions made 1) by the AO merely on surmises and suspicion. 2) The Ld. CIT Appeals erred in confirming the addition of Rs. 30 lakhs on the assumption that ordinarily money withdrawn in 2021 for specific purpose would not have been kept as cash in hand for an unreasonably long period overlooking the fact that the amount was withdrawn from the bank, source of the amount was explained and the reasons for such withdrawal was explained, which is further proved by the fact that the property was finally purchased in the year 2024. 3) The Ld. Commissioner Appeals further erred in doubting the withdrawals made by Mr. B Raju which was never even disputed by the Assessing Officer and was never even questioned at the Appellate stage, confirming the addition made by the Assessing Officer on an altogether new reason is arbitrary and contrary to the Principles of Natural Justice.

4) The Ld. Commissioner Appeals and Assessing Officer ought to have appreciated the fact that when there is no material on record to show that withdrawals were utilised elsewhere by the Appellant, source for the cash in hand emanating from such withdrawals cannot be doubted, resultantly, addition made undersection 69A of the Act deserves to be deleted. 5) The Ld. Commissioner Appeals erred in confirming the addition made by the Assessing Officer referable to the Foreign Currency in hand USD 4243 valued at Rs. 3,46,738/- as unexplained money under section 69A of the Act overlooking the fact that said money was sponsored by the Great Commission Foundation Inc. to Appellant and his son for their travel expenses, which was even confirmed by the said organisation through confirmation letter dt.19.05.2023. 6) The Ld. Commissioner Appeals ought to have appreciated the fact that requisite details pertaining to the Foreign travel were duly placed on record and infact in the Confirmation letter it was clearly mentioned that Foreign Currency to the tune of USD 4,243 was given during Appellants visit to USA in the year 2022 and thus the assumptions of the Commissioner Appeals are purely based on guess work and conjectures. 7) The Ld. Commissioner Appeals erred in not properly considering the ground raised by the Appellant w.r.t. issuance of show cause notice containing proposed variations before making arbitrary assessment, which is in gross violation of the principles of natural justice as well as Apex Court decision in the case of TIN Box Co. 249 ITR 216. 8) For these and other grounds that may be urged during the course of Appeal proceedings, the arbitrary additions made by the Assessing Officer may be quashed OR deleted.”

3.

The assessee has challenged the Order of the learned CIT(A) whereby the addition made by the Assessing Officer of Rs.30 lakhs on account of unexplained money as well as sum of Rs.3,46,780/- on account of foreign currency in USD 4243 found during the course of search and seizure action. The learned Authorised Representative of the Assessee has submitted that during the course of assessment proceedings the assessee explained that the said amount of Rs.30 lakhs was withdrawn from his bank account in the year 2021 for the purpose of registration expenses to be incurred in respect of purchase of multiple plots. However, since the registration of the same was delayed, the said amount of cash remains with the assessee, and it was seized during the course of search and seizure action in the year 2023. He has thus submitted that though the assessee explained the source of the said amount as withdrawal made by the assessee from the bank account in the year 2021 however, the Assessing Officer has not considered the explanation of source and made the addition. The learned Authorised Representative of the Assessee has further submitted that subsequently the assessee has purchased the plots of land vide sale deeds in the year 2023 to 2025 and in respect of the said transactions the assessee has now filed the documentary evidence of purchase of these plots of land by producing the sale deeds, transfer certificate/mutation as well as Memorandum of Understanding between the seller and the assessee. Thus, the learned Authorised Representative of the Assessee has submitted that the assessee has now produced all the relevant documents including the affidavit of one Sri B. Raju to explain that he was working with M/s. John Foundation as Office Assistant looking after banking transactions of the foundation as well as personal banking transaction of the assessee and his family members. The learned Authorised Representative of the Assessee has thus submitted that past withdrawal of Rs.30 lakhs made from the bank account through bearer cheque given to Sri B Raju is also explained as reflected from the bank account statement and affidavit of Shri B Raju. He has also filed an application for admission of the additional evidence as per Rule 29 of ITAT Rules, 1963 and submitted that all these additional evidence including the sale deed and other documents are public documents and relevant for deciding the issue in respect of the availability of cash of Rs.30 lakhs with the assessee and purpose of the same as explained by the assessee during the course of assessment proceedings. He has also submitted that the availability of the US dollars with the assessee at the time of search is also explained by the assessee as assessee is frequently visiting to foreign countries as reflected from the passport of the assessee and therefore, the said foreign currency was an advance given by US foundation for the stay/boarding and other expenses during the proposed visiting to the USA in the month of April and May 2023. A confirmation letter in this regard is also filed. Thus, the learned Authorised Representative of the Assessee has submitted that all these documents may be verified at the level of the Assessing Officer. Accordingly, he has pleaded that the matter may be set aside to the record of the Assessing Officer for verification and examination of the additional evidence filed by the assessee to explain the source of availability of cash as well as US dollar at the time of search.

4.

On the other hand, the learned DR has submitted that the assessee has failed to produce any supporting evidence either before the Assessing Officer or before the learned CIT(A) despite several opportunities granted to the assessee. Therefore, in the absence of any reasons explained by the assessee as to why the additional evidence now filed by the assessee was not produced before the authorities below, the same should not be admitted.

5.

We have considered the rival submissions as well as relevant material on record. The Assessing Officer has made the addition of Rs.30 lakhs on account of the cash seized during the course of search and seizure action due to lack of valid explanation and supporting documentary evidences as given finding in Para nos.5.1 of the assessment order as under:

“5.1. After perusal of the information furnished by the assessee, it is found that the cash was withdrawn during the month of September, 2021 and October, 2021 by the assessee and one B. Raju. Further during post search proceedings, the assessee has submitted that the said cash withdrawn and was kept at his home due to pendency of registration of plots from KLR/Edikal Infraventure LLP. However, the search and seizure operations were conducted on 15.03.2023 after lapse of 18 months of such cash withdrawals and during the course of search operation cash of Rs. 30,00,000/- was seized due to lack of valid explanation or any supporting documentary evidences. In this regard it is evident that the assessee's claim is after thought and holds no ground. No person will keep such huge amount of cash at home for such a long period. Hence, the assessee's claim is not acceptable and cash amounting to Rs. 30,00,000/- is treated as unexplained money u/s 69A of the IT Act and taxed @ 60% under the provisions of 115BBE of the IT Act. Addition: 30,00,000/-”

5.1. Further the Assessing Officer has also made an addition of Rs.3,46,738/- as exchange value in Indian currency USD 4243 found during the course of search and seizure operation in Para no.8 of the assessment order as under: “8. During the course of assessment proceedings, the assesse was asked to furnish the sources for USD 4,243 valued at Rs.

3,46,738/- was found and seized during search and seizure operation along with documentary evidences. However, assessee failed to explain the sources for the same satisfactorily. Hence, the USD 4,243 valued at Rs. 3,46,738/- is treated as unexplained money u/s 69A of the IT Act and taxed @60% under the provisions of 115BBE of the IT Act. Addition: 3,46,738/-”

5.2. Thus, both these additions were made by the Assessing Officer for want of proper explanation of the source and supporting documentary evidence. The said additions were confirmed by the learned CIT(A) while passing the impugned order with the observation that the claim of the assessee that withdrawal of Rs.30 lakhs was from bank account for the purpose of purchase of property was also found through one Sri B Raju. Therefore, in the absence of any supporting documentary evidence, the learned CIT(A) has confirmed the addition made by the Assessing Officer. The learned CIT(A) has specifically stated that an amount of Rs.21,80,000/- were withdrawn through cheque issued in the name of Sri B Raju. Now the assessee has filed an affidavit of Sri B Raju as well as the sale deeds for purchase of plots of land the purpose for which the cash was withdrawn by the assessee but due to delay in transaction of purchase of these plots of land the amount was with the assessee at the time of search and seizure action. The assessee has also filed certain MOUs between the seller/developer and the assessee to show that at the time of withdrawing of the money from the bank account the assessee was negotiating with the seller for purchase of the plots of land. Thus, the registered sale deed as well as other documents filed by the assessee are required to be verified and examined in respect of explanation of source of Rs.30 lakhs found during the course of search and seizure action. The assessee also explained that the USD 4243 was on account of advance given by the US Foundation for the proposed visit of the assessee to USA in the month of April-May, 2023. The Assessing Officer is required to verify this fact from the relevant record to be filed by the assessee apart from the confirmation filed by the assessee from Great Commission Foundation, Inc. regarding the proposed visit of the assessee to USA and the advance given for the said visit. Accordingly, in the facts and circumstances of the case and in the interest of justice, the Order of the learned CIT(A) is set aside, and the matter is remanded to the record of the Assessing Officer for fresh adjudication after verification and examination of the additional evidence filed by the assessee. Needless to say, the assessee be given appropriate opportunity of hearing before passing the fresh order.

6.

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

Order pronounced in the open court on 04.11.2026.

Sd/- Sd/- MANJUNATHA G. VIJAY PAL RAO ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, Dated 04th day of November, 2026. VBP Copy to: SAJI KOPA JOHN, # 5-1007 B.R. NAGAR, OLD ALWAL, 1. SECUNDERABAD, TIRUMALAGIRI, BOLARUM S.O, RANGA REDDY-500010, TELANGANA 2. DCIT CENTRAL CIRCLE-3(3), # AAYKAR BHAWAN, OPP- LB STADIUM, BASHEER BAGH, HYDERABAD-500004, TELANGANA. 3. The CIT(A)-11, 6th Floor, AAYKAR BHAWAN, OPP- LB STADIUM, BASHEER BAGH, HYDERABAD-500004, TELANGANA. 4. THE PR,CIT-(CENTRAL), HYDERABAD. 5. THE D.R., ITAT, HYDERABAD B-BENCH, HYDERABAD. 6. GUARD FILE TRUE COPY VADREV Digitally signed by VADREVU U PRASADA RAO ASSISTANT REGISTRAR / PRASAD Date: I.T.A.T., HYDERABAD 2026.11.04 A RAO 14:54:46 +05'30'

More judgments on Section 69A

All 15,297 judgments and leading authorities on Section 69A →

Recent GST High Court judgments

Search GST case law →