KOTTI CHANDRAPRAKASH,HYDERABAD vs. DCIT., CENTRAL CIRCLE-3(4), HYDERABAD

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ITA 780/HYD/2025Status: DisposedITAT Hyderabad30 September 2025AY 2019-2011 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the validity of proceedings under Section 153C is not dependent on the initiation of proceedings under Section 153A in the searched person's case. The jurisdictional requirement is the recording of satisfaction and handing over of material, which was fulfilled. Therefore, ground (ii) of the appeal fails. Regarding limitation, the Tribunal clarified that for an 'other person' under Section 153C, the limitation is reckoned from the date the seized material is handed over to their Assessing Officer, or from the date of recording satisfaction when the same AO has jurisdiction over both. With the satisfaction note dated 30.08.2021, the assessment framed on 04.01.2023 was within the period prescribed by the second proviso to Section 153B(1). Thus, ground (iii) is rejected. On merits, the Tribunal agreed with the CIT(A) that a separate addition of Rs. 70 lacs would lead to double taxation. However, it upheld the CIT(A)'s finding that since the assessee failed to produce supporting evidence like cash books, vouchers, or bank records to establish the cash as genuine business receipts, the amount must be treated as unexplained money under Section 69A and taxed under Section 115BBE, as a mere declaration in the return does not establish the true nature of income without corroborative evidence. The order of the CIT(A) is upheld.

What were the facts?

The assessee, Kotti Chandraprakash, is in appeal against the order of the CIT(A) dated 09.03.2025, which arose from an order passed by the AO under Section 153C of the Income Tax Act, 1961, dated 04.01.2023, for Assessment Year 2019-20. The dispute concerns Rs. 70 lacs cash found in possession of the assessee's employee, Shri Chandrakanth Varma, on 16.03.2019. The cash was seized by police and requisitioned by the Income-tax Investigation Wing under Section 132A. The employee stated the cash belonged to the assessee, who admitted it was business cash but couldn't substantiate it with vouchers. The assessee declared this Rs. 70 lacs as income in his return filed on 31.08.2019. The AO initiated proceedings under Section 153C and added the Rs. 70 lacs as unexplained money under Section 69A, taxed under Section 115BBE. The CIT(A) deleted the addition over and above returned income but confirmed the characterization as unexplained money.

What were the issues?

1. Whether the proceedings initiated under Section 153C of the Income Tax Act, 1961, in the case of the assessee are invalid in the absence of proceedings under Section 153A in the case of the searched person (Shri Chandrakanth Verma)? - Assessee's contention: Proceedings under Section 153C are invalid if Section 153A proceedings were not initiated against the person from whom the material was seized. - Revenue's contention: Not recorded. 2. Whether the assessment order passed under Section 153C of the Income Tax Act, 1961, dated 04.01.2023, is barred by limitation as provided in the proviso to Section 153B(1) of the Act? - Assessee's contention: The assessment was completed beyond 18 months from the date of requisitioning of cash (16.03.2019), making it time-barred. - Revenue's contention: Not recorded. 3. Whether the sum of Rs. 70 lacs, already declared by the assessee in his return of income, can be treated as unexplained money under Section 69A of the Income Tax Act, 1961, and taxed under Section 115BBE? - Assessee's contention: The amount is business income and has already been declared and taxed. - Revenue's contention: The amount is unexplained money under Section 69A.

Which sections of the Income-tax Act were involved?

Section 153C,Section 132A,Section 153A,Section 153B,Section 69A,Section 115BBE,Section 131

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad A’ Bench, Hyderabad

आदेशकी �ितिलिप अ�ेिषत/ Copy of the order forwarded to:- 1. िनधा�रती/The Assessee : Shri Kotti Chandraprakash, 15-6-12, Siddimber Bazar, Hyderabad 2. राज�/ The Revenue : The DCIT, Central Circle-3(4), Hyderabad 3. The Principal Commissioner of Income Tax, Central Circle, Hyderabad 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, हैदराबाद / DR, ITAT, Hyderabad 5. गाड�फ़ाईल / Guard file

आदेशानुसार / BY ORDER

Sr. Private Secretary ITAT, Hyderabad

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