JAYAKRISHNA NANDAMURI,HYDERABAD vs. DCIT, CIRCLE -2(1) , HYDERABAD

Pursuant to the directions of the Hon’ble High Court, the Ld. AO recorded the statement of the jeweller and provided opportunity of cross-examination to the assessee. After considering the statement, cross-examination, and submissions of the assessee, the Ld. AO again made addition of Rs.23,53,750/- under section 69B of the Act. Accordingly, the assessment in the second round was completed by the Ld. AO under section 143(3) read with section 260 of the Act on 31.03.2016, assessing total income of the assessee at Rs.24,56,750/-.

Aggrieved with the order of the Ld. AO, the assessee preferred appeal before the Ld. First Appellate Authority. The Ld. First Appellate Authority confirmed the addition made by the Ld. AO.

Aggrieved with the order of the Ld. First Appellate Authority, the assessee is now in appeal before this Tribunal. At the outset, the Learned Authorized Representative (“Ld. AR”) submitted that the only issue involved in the present appeal is the addition of Rs.23,53,750/- made under section 69B of the Act. It was contended that the impugned cash payment was made by the Personal Assistant (“PA”) of the assessee to the jeweller and the jewellery was also handed over by the jeweller to the PA. It was further submitted that no evidence has been brought on record by the Revenue to establish that the cash was directly paid by the assessee to the jeweller or that the jewellery was received directly by the assessee. The Ld. AR further submitted that, in fact, the daughter of the assessee had purchased the jewellery through the PA of the assessee and the source of investment in the hands of the daughter has been duly explained with documentary evidence, 5 which has not been doubted by the Revenue authorities. Accordingly, it was contended that the addition in the hands of the assessee has been made merely on suspicion and is liable to be deleted. In support of their contention, the Ld. AR relied on the following judicial precedents: (a) 454 ITR 595 (SC) D.N. Singh Vs. Commissioner of Income Tax and Another (b) 419 ITR 132 (Guj) – Principal Commissioner of Income Tax Vs. Himanshu Chandulal Patel (c) 367 ITR 112 (Delhi) -Pepsi Foods P. Ltd Vs. Assistant commissioner of Income Tax (d) 290 ITR 245 (Delhi) –CIT Vs. Lalit Bhasin (e) 338 ITR 485 -CIT Vs. Puneet Sabharwal (f) KP Varghese Case Hon'ble Supreme Court in 131 ITR 597 (g)

Per contra, the Learned Departmental Representative (“Ld. DR”) relied on the orders of the lower authorities and submitted that the assessee has failed to satisfactorily explain the source of investment. It was contended that the findings of the Ld. AO as well as the Ld. CIT(A) are based on material evidence and no interference is called for.

We have considered the rival submissions and perused the material available on record including the case laws relied upon. On perusal of the same, we find that there is no dispute with regard to the fact that cash amounting to Rs.23,53,750/- was paid for purchase of jewellery to the jeweller through the PA of the assessee and the jewellery was handed over by the jeweller to the PA of the assessee. In this regard we have gone through para nos.1.6 to 3.2 of the order of the Ld. Ld. AO which is to the following effect:

On perusal of the above, we find that the Ld. AO has reproduced the relevant statement of the jeweller recorded on 26.08.2015 and also the cross examination of the jeweller by the assessee on 28.03.2016. The Ld. AO has elaborately recorded the relevant facts of the case for making the impugned addition. We further find that a crucial fact emerging from the record is that, part of the said cash payment of Rs.23,53,750/- resulted in refund of the balance amount by the jeweller through cheque in the name of the assessee, which was handed over by the jeweller to the PA of the assessee and the cheque was subsequently deposited in the bank account of the assessee. This fact of refund by cheque in the name of the assessee and its deposit in the assessee’s bank account 12 has not been disputed by the assessee at any stage. Therefore, in our considered view, this undisputed fact clearly establishes a direct nexus between the assessee and the transaction with the jeweller. Once the refund arising out of the very same transaction has been received in the name of the assessee and credited to his bank account, the contention of the assessee that the original cash payment did not pertain to him cannot be accepted. The conduct of the transaction, including the routing of refund in the name of the assessee, militates against the stand taken by the assessee. Accordingly, we are of the considered view that the Ld. AO has rightly treated the impugned amount as unexplained investment under section 69B of the Act, and the Ld. CIT(A) was justified in confirming the same.

As far as the reliance placed on by the assessee on various judicial precedents, the same are not applicable to the present facts of the case. In the present case, the deposit of cheque in the bank account of the assessee representing the refund of balance amount out of the impugned cash payment clearly establishes a direct nexus between the assessee and the transaction with the jeweller. In view of the present facts and circumstances of the case, we do not find any infirmity in the order of the Ld. CIT(A).

In the result, the appeal of the assessee is dismissed. Order pronounced in the Open Court on 8th April, 2026. Sd/- Sd/- (RAVISH SOOD) (MADHUSUDAN SAWDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, dated April, 2026. Vinodan/sps 13 Copy to: S.No Addresses 1 Shri Jayakrishna Nandamuri, Plot No.456A, Road No.86, Jubilee Hills, Near Film Nagar Dargha, Hyderabad 500096 2 Dy. CIT, Circle 2(1) Signature Towers, Kondapur, Hyderabad 500084 3 Pr. CIT - Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order