RAPOLU KAVITHA,HYDERABAD vs. DCIT., CENTRAL CIRCLE-2(1), HYDERABAD

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ITA 775/HYD/2025Status: DisposedITAT Hyderabad08 October 2025AY 2019-2014 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the addition of Rs.29,80,403/- as unexplained investment under Section 69 is upheld. The seized document, though found from a third party, was a structured record with specific details matching the assessee's name, plot number, size, and some payment particulars in the registered sale deed. The Tribunal distinguished the case from CBI vs. V.C. Shukla, stating this document had corroborative value due to its structured nature and linkage to the sale deed, making the cash entries part of the same transaction. However, the addition of Rs.4,39,000/- claimed as gifts from parents is directed to be deleted. The Tribunal noted that the assessee provided an explanation identifying parents with known income sources, and the Revenue did not disprove it with further verification, distinguishing it from Sadiq Sheikh vs. CIT where no explanation was offered. For ITA No.775/Hyd/2025, the issues are identical to ITA No.772/Hyd/2025 regarding additions under Section 69, and the findings are applied mutatis mutandis, upholding the addition.

What were the facts?

The appeals by Shri Sunil Kumar Mukka (ITA No.772/Hyd/2025) and Ms. Rapolu Kavitha (ITA No.775/Hyd/2025) challenge the orders of the Ld. CIT(A)-12, Hyderabad, dated 05.03.2025, for Assessment Year 2019-20. The assessee, Shri Sunil Kumar Mukka, purchased a plot for Rs.77,17,500, with the registered sale deed reflecting Rs.22,05,000. A search in the case of M/s. MSR India Ltd. and its director yielded seized documents. The Ld. AO noted cash payments of Rs.29,80,403 and other cash/cheque deposits of Rs.4,39,000. The Ld. AO treated the Rs.29,80,403 as unexplained investment under Section 69 and the Rs.4,39,000 as unexplained gift. The Ld. CIT(A) upheld these additions. The assessee argues the seized document is a 'dumb document' and lacks corroboration, while the revenue contends it's a structured record linked to the sale deed. For Ms. Rapolu Kavitha, the issues are similar, involving additions based on seized documents.

What were the issues?

1. Whether the addition of Rs.29,80,403/- as unexplained investment under Section 69 of the Income Tax Act, 1961, is sustainable when based on a seized document not found in the assessee's premises and lacking corroborative evidence? (Question of law and fact, turns on Section 69). - Assessee's contention: The addition is based on a 'dumb document' (loose sheet) seized from a third party, lacking evidentiary value without corroboration, citing CBI vs. V.C. Shukla. Provisions of Section 69 cannot be applied without books of account or independent verification. - Revenue's contention: The seized document is not a 'casual loose sheet' but a systematic record with specific linkages to the sale deed (plot number, size, assessee's name, payment details), thus having direct nexus and corroborative value. The assessee cannot selectively deny cash components when other details match. 2. Whether the addition of Rs.4,39,000/- (claimed as gifts from parents) as unexplained is sustainable, given the explanation of parents' business/tailoring income and prior deposits in their accounts? (Question of law and fact, turns on Section 69). - Assessee's contention: The amounts were genuine gifts from parents with explained sources (business and tailoring income). The Ld. AO did not conduct further inquiry or disprove the gifts. - Revenue's contention: The assessee failed to furnish evidence regarding the parents' capacity to advance such amounts, citing Sadiq Sheikh vs. CIT. The lower authorities' orders are supported.

Which sections of the Income-tax Act were involved?

Section 69,Section 153C,Section 143(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘B’ Bench, Hyderabad

Before: SHRI VIJAY PAL RAO & SHRI MADHUSUDAN SAWDIA

For Respondent: Dr. Sachin Kumar, SR-DR
Hearing: 16/09/2025

Heard together (2 matters)

ITA No.772/Hyd/2025
ITA No.775/Hyd/2025

Read from the judgment's own cause title. This page is filed under one of them.

per seized documents match with actual sale deed. When most of the particulars match with the sale deed, the inference is compelling that the cash entries also form part of the same transaction. The assessee’s reliance on the decision of Hon’ble Supreme Court in the case of CBI Vs. V.C. Shukla (supra) is distinguishable. That decision dealt with stray loose papers. Here, the document is not a random scrap but a structured statement, having linkage with the registered document, thus carrying corroborative value. Therefore, when most of the details of the seized document matches with the actual sale deed i.e. Plot number, size, assessee’s name and some part of sales consideration, the assessee cannot selectively deny the cash components of Rs.29,80,403/-. Accordingly, we uphold the findings of the lower authorities that cash payments of Rs.29,80,403/- represent unexplained investment.

10.

With regard to the addition of Rs.4,39,000/-, the assessee explained that the amount of Rs.3,50,000/- was received through bank transfers and Rs.89,000/- was received in cash from his father and mother, whose incomes were from business and tailoring work.

1.

It is correct that equivalent cash deposits were made in their bank accounts before transfer, but the assessee has furnished at least an explanation of their sources. The Ld. AO did not conduct any further enquiry or bring contrary evidence. The reliance of the Ld. DR on the decision of Hon’ble Supreme Court in the case of Sadiq Sheikh vs. CIT (supra) is distinguishable. In that case, the assessee offered no explanation regarding the capacity of creditors. However in the present case, the assessee has furnished an explanation, identifying the parents as sources with known activities, and the Revenue has not disproved it by further verification. In these facts, we hold that the addition of Rs.4,39,000/- cannot be sustained. The same is directed to be deleted.

11.

In the result, the appeal of the assessee in is partly allowed.

12.

The assessee has raised the following grounds of appeal :

1.

13. The issues involved in this appeal is identical to the issues involved in the appeal in regarding addition made by Ld. AO on the basis of seized documents, wherein we have uphold the addition made by the Ld. AO under section 69 of the Act. Therefore, our discussion and findings in are mutatis mutandis applicable to this appeal also. Accordingly, we uphold the addition made by the Ld. Assessing Officer in this appeal also.

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