RAMESH ADDU,SECUNDERABAD vs. ITO., WARD-13(1), HYDERABAD

PER MANJUNATHA G., A.M :

This appeal filed by the assessee is directed against the order of the learned Addl/Joint Commissioner Income Tax (Appeals),
Mumbai, dated 15.07.2025, pertaining to the assessment year
2017-18. 2
Ramesh Addu

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Ramesh Addu

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Ramesh Addu persons, however, at later stage the assessee has given different names except in one case of Mr. Bharath Reddy. However, even in the case of Mr. Bharath Reddy, the assessee has failed to prove the identity and creditworthiness of the parties. Therefore, rejected the explanation of the assessee and made addition of Rs.
13,50,000/- towards cash deposits under Section 69A of the Income Tax Act, 1961. 4. Aggrieved by the assessment order, the assessee preferred appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee has reiterated the arguments made before the A.O. claimed and that assessee being a retired pensioner had advanced loans to various persons out of his retirement benefit and the same has received back during the financial year under consideration which is a source for cash deposited into bank account. The Ld. CIT(A) after considering the relevant submissions of the assessee and also taken note of the reasons given by the A.O. to make addition towards cash deposits, observed that, the explanations given by the assessee have been inconsistent and contradictory. Initially, the source of cash deposits was claimed to be retirement benefits, however, later, the assessee stated that, the deposits were from 5
Ramesh Addu recovery of earlier loans from 8 individuals. Yet again, a third version was submitted where the names and figures did not match the earlier explanation and only one person overlapped between the two lists. Such contradictory and shifting stance wear away the credibility of the explanation offered by the assessee. It is also significant to note that, as per the A.O.'s detailed verification, the assessee's retirement benefits were intact and available in his
UCO Bank account. The bank statements produced show no substantial cash withdrawals prior to the demonetization period from any of the four bank accounts. Most transactions in these accounts were carried out through NEFT/RTGS. This indicates that the assessee did not withdraw any corresponding amounts in cash to support the alleged cash loans. Therefore, taking note of the relevant reasons given by the A.O., rejected the explanation of the assessee and sustained addition of Rs. 13,50,000/- as unexplained money under Section 69A of the Income Tax Act,
1961. 5. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal.

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Ramesh Addu

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Ramesh Addu

CIT(A), submitted that, the assessee has taken different stand at different levels, which is evident from the facts brought on record by the A.O., where the assessee has initially claimed that, he has received back loans from 8 persons and the same has been subsequently changed and claimed that, he has received back amount from 6 persons. Further, the assessee has also failed to prove how the loans has been advanced to the above persons going by the bank statements of the assessee, where the A.O. has recorded categorical finding that, the retirement benefits of the assessee are available with the UCO Bank, without drawing any amount from the bank account. Since the assessee has failed to prove the loans given to 8 persons and also failed to prove the receipt of said amount from 8 persons with relevant details, the A.O. has rightly rejected the explanation of the assessee with regard to source of cash deposits. The Ld. CIT(A), after considering the relevant facts, has rightly sustained the addition made by the A.O. Therefore, she submitted that, the order of the learned CIT(A) should be upheld.
8. We have heard both parties, perused the material available on record and had gone through the orders of the authorities below.

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Ramesh Addu

There is no dispute with regard to the amount of cash deposit into bank account and explanation of the assessee with regard to the source for said cash deposit. In fact, the A.O. has made additions for Rs. 13,50,000/- towards cash deposit into different bank accounts during demonetization period. The assessee has explained the source for cash deposit out of advances received from 8 persons and further claimed that, the said advance has been given to above persons out of his retirement benefits, for which the assessee has furnished confirmation letters from the above persons. We have gone through the relevant arguments of the assessee in light of evidences filed in support of his contentions and we find that, the confirmation letters filed by the assessee from 8 persons are without any PAN number and other credentials. Further, the assessee has also failed to produce the persons before the A.O. for verification when the A.O. asked the assessee to produce the above persons for verification. Further, the arguments of the assessee that out of retirement benefits, he had given advances to the above persons and the same has been received back is also proved to be wrong going by the reasons given by the A.O. in the assessment order where the A.O. claims

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Ramesh Addu that the retirement benefits of the assessee were intact in UCO
Bank account. From the details filed by the assessee, it cannot be said that the assessee has satisfactorily explained the source for cash deposit of Rs. 13,50,000/- into bank accounts. However, the only fact that needs to be considered is the arguments of the assessee that he was ready to produce the persons for verification of the A.O. during the assessment proceedings and the A.O. has not given sufficient time to produce the persons. We find that, the assessee, by way of a letter dated 11.12.2019 addressed to the A.O., categorically stated that, the parties are ready to present before the A.O. at 2 p.m. for verification. Although the assessee was ready to produce the persons for verification along with the details, but the A.O. without providing an opportunity to the assessee has passed the order and made addition towards cash deposits. Since the A.O. has passed the order without providing a reasonable opportunity of hearing to the assessee to explain his case, in our considered view, the matter needs to be restored to the file of the A.O. Thus, we set aside the order of the Ld. CIT(A), and restore the issue back to the file of A.O. , with a direction to reconsider the issue ‘de novo’ after providing one more opportunity

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Ramesh Addu of hearing to the assessee to produce the creditors for verification and also any other evidences that may be filed to explain source for cash deposit.

Hyderabad, dated 19.12.2025. TYNM/sps

आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:-

आदेशधिुसधर / BY ORDER