SHARANAM AGARWAL,HYDERABAD vs. INCOME TAX OFFICER, WARD-4(1), HYDERABAD

PER RAVISH SOOD, JM:

The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National
Faceless Appeal Center (NFAC), Delhi, dated 25/03/2025, which in turn arises from the order passed by the Assessing Officer under Section 2
143(3) of the Income Tax Act, 1961 (for short, “Act”), dated 06/12/2019
for A.Y. 2017-18. 2. The assessee has assailed the impugned order on the following grounds of appeal before us:
1. “The order of the Ld. CIT(A) is erroneous both on facts and in law.
2. The Ld. CIT(A) erred in confirming the action of the Assessing
Officer in making addition of Rs. 12,00,725/- as unexplained cash available by invoking the provisions of section 69A of the Act.
3. The Ld. CIT(A) ought to have considered the fact that the appellant had substantial sources for depositing the amount.
4. The Ld. CIT(A) ought to have considered the fact that the appellant was filing the returns of income even in earlier assessment years and admitted the income which was available with him.
5. Ther Ld. CIT(A) ought to have held that the provisions of section 69A have no application and that the addition of Rs. 12,00,725/- should have been deleted.
6. Any other ground / grounds that may be urged a the time of hearing.”

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915010022723808 with Axis Bank, Khairatabad Branch, Hyderabad. On being queried, it was the claim of the assessee that the subject cash deposit in his bank account were sourced out of the income earned by him from imparting tuitions and the interest received on the loans/advances given by him. Elaborating further, it was the assesee’s claim that the aforesaid incomes were duly offered by him for tax in his return of income for the subject year and also the preceding years.

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6. Aggrieved, the assessee carried the matter in appeal before the CIT(A), but without success. For the sake of clarity, the observations of the CIT(A) are culled out as under:

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(for short, “Ld.AR”) for the assessee, at the threshold of hearing of the appeal, submitted that the present appeal involved a delay of 58 days.
Elaborating on the reasons leading to the delay, the Ld. AR submitted

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Sharanam Agarwal vs. ITO that the same had crept in for the reason that the assessee had learnt about the order of the CIT(A) only when the penalty notice U/s.
271AAC(1) of the Act was uploaded in his case on 22/07/2025. The Ld.
AR submitted that the assessee had thereafter immediately approached his Chartered Accountant and after collecting the requisite documents filed the present appeal which by the time involved a delay of 58 days.
The Ld. AR to buttress her above contention has taken us through the application filed by the assessee seeking condonation of the delay along with an “affidavit”, dated 22/09/2025 supporting the same. Carrying her contentions further, the Ld. AR submitted that though the assessee had in the Memorandum of Appeal i.e., “Form-35” specifically opted out of the receipt of the notices/communication from the CIT(A)’s office through email, but no physical/hard copy of the order of the CIT(A) was ever served upon him. The Ld. AR to support her aforesaid claim had taken us through “Form-35”. The Ld. AR submitted that considering the totality of the facts involved in the present appeal the delay therein involved may in all fairness be condoned.

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11. Apropos, the merits of the case, the Ld. AR submitted that as the assessee was deriving income from imparting tuitions for the last few years, and the subject cash deposits made in his bank account during the demonetisation period were sourced from the accumulated funds lying available with him from the said source of income, therefore, the AO was not justified to have held any portion of the same as having been sourced out of his unexplained money U/s. 69A of the Act. The Ld. AR to buttress her aforesaid claim had taken us through the returns of income filed by the assessee for the year under consideration and that of the immediately two preceding years. The Ld. AR submitted that as the assessee was having sufficient cash in hand available with him to source the cash deposits from his accumulated savings, which in turn was sourced from his aforesaid source of income, therefore, the impugned addition of Rs. 12,00,725/- made by the AO U/s. 69A of the Act cannot be sustained and is liable to be vacated.

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“Ld. DR”), submitted that as the assessee had failed to place on record any material which would irrefutably evidence that the cash deposits made in his bank account during the demonetization period was sourced out of his explained source of income, therefore, the AO had rightly held the same as having been sourced out of his unexplained money u/s 69A of the Act. Elaborating further on his contention, the Ld. DR submitted that the claim of the assessee that he was imparting tuitions and the subject cash deposits in his bank account during the year were sourced from the funds accumulated by him over the years from the said source of income was totally unsubstantiated and nothing had been placed on record by him to corroborate his said claim.

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Although, it is a fact discernible from the record that the assessee had filed his return of income for the year under consideration i.e., AY 2017-
18 (Rs. 4,95,900/-); AY 2016-17 (Rs. 3,58,000/-) and AY 2015-16 (Rs.
3,32,000/-), wherein he has disclosed income derived from imparting tuitions, but had failed to place on record any documentary evidence which would irrefutably evidence the availability of cash in hand of Rs.
13.50 lakhs with him on the subject date on which cash deposits were made in his bank account. At the same time, we are of the firm conviction that as the A.O had observed that the assessee at the time of making the subject cash deposits would be in possession of cash in hand of Rs. 1,49,275/- out of his returned income of Rs. 4,95,000/-, which income, as disclosed by the assessee in his return of income was primarily sourced from imparting of tuitions, therefore, he had impliedly accepted the fact that the assessee was in receipt of income by providing tuitions.

Order pronounced U/Rule 34(4) of the Appellate Tribunal
Rules, 1963 on 30th September, 2025. S (मधुसूदन सावͫडया)
(MADHUSUDAN SAWDIA)
लेखासद˟/ACCOUNTANT MEMBER (रवीश सूद)
(RAVISH SOOD)
Ɋाियकसद˟/JUDICIAL MEMBER d/- Hyderabad, dated 30.09.2025. **OKK/sps
आदेशकीŮितिलिपअŤेिषत/ Copy of the order forwarded to:-

आदेशानुसार / BY ORDER

Sr. Private Secretary
ITAT, Hyderabad.