SATYANAGA VEERA ANJANEYA BABU GUTTA,HYDERABAD vs. ITO., WARD - 13(5), HYDERABAD.

आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M.: This appeal is filed by Shri Satyanaga Veera Anjaneya Babu Gutta (“the assessee”), feeling aggrieved by the order passed by the Learned Addl/JCIT(A)-2, Chennai (“Ld. First Appellate Authority”), dated 17.02.2025 for the A.Y. 2017-18. 2. The assessee has raised the following grounds of appeal :

4. Aggrieved with the order of Ld. AO, the assessee filed an appeal before the Ld. First Appellate Authority, who dismissed the same by confirming the addition.

5. Aggrieved with the order of Ld. First Appellate Authority, the assessee is now in appeal before the Tribunal. The Learned Authorised Representative (“Ld. AR”) submitted that, the total addition of Rs.7,89,202/- made by the Ld. AO comprises two parts:

(a) Rs.6,00,000/- alleged as unexplained cash deposit, and (b) Rs.1,89,202/- being excess deposit not backed by sufficient cash on hand.

5.1 As regards the addition of Rs.6,00,000/- is concerned, the Ld. AR submitted that, the assessee had clearly explained that the amount was drawn by way of bearer cheque in the name of his brother, Shri G. Ramesh Babu, and the cash was subsequently handed over to the assessee and deposited into his bank account. The Ld. AO, however, rejected the explanation without making any independent enquiry or calling for confirmation from the brother of the assessee. It was argued that no opportunity was given to the assessee to substantiate this transaction.

5.2 With respect to the balance addition of Rs.1,89,202/- is concerned, the Ld. AR submitted that the assessee had submitted working of cash availability before the Ld. AO showing cash deposits made prior to the demonetisation period amounting to Rs.24,93,202/-. However, due to a clerical oversight, two earlier deposits of Rs.1,00,000/- each made on 20.04.2016 and 25.04.2016 were inadvertently omitted from the reconciliation. The Ld. AR submitted that the assessee is in a position to file a corrected cash flow statement and supporting evidence, if one more opportunity is granted. Thus, the Ld. AR prayed that in the interest of justice and fair play, both additions may be restored to the file of the Ld. AO for proper verification and adjudication.

7.1 On the addition of Rs.6,00,000/-, we find that the assessee had claimed the amount was received in cash from his brother, who had drawn the sum by cheque in his own name. However, the record does not show any confirmation or affidavit from the brother of the assessee, nor any effort by the Ld. AO to verify this claim through notice under Section 133(6) of the Act or any other mode of enquiry. The contention of the Ld. AR that the assessee was not granted sufficient opportunity to substantiate this transaction appears justified in view of the lack of enquiry or adverse material. In these circumstances, in the interest of natural justice, we are inclined to restore this issue to the file of the Ld. AO for fresh examination after granting adequate opportunity to the assessee to furnish confirmation and other supporting evidence.

7.2 On the addition of Rs.1,89,202/-, the assessee submitted that due to an inadvertent error, two earlier deposits made in April 2016 were omitted from the cash flow statement. We have gone through the bank entries placed in the page no.6 of the paper book and find that the said deposits are reflected in the bank account. If the assessee is able to provide a revised cash availability statement duly backed by evidence, this issue also deserves re-examination. Thus, to verify the genuineness of the revised working, this issue is also remitted to the file of the Ld. AO for fresh adjudication.

7.3 In view of the above discussion, both the additions of Rs.6,00,000/- and Rs.1,89,202/- made under Section 69A of the Act are set aside, and the matter is restored to the file of the Ld. AO with a direction to re-adjudicate the issues afresh, after affording a reasonable opportunity of being heard to the assessee and verifying all supporting documents.

Order pronounced in the open Court on 8th July, 2025.