ABDUL SALAM SHAIK,PILER vs. INCOME TAX OFFICER, WARD-1(1), TIRUPATI

ITA 1371/HYD/2025Status: DisposedITAT Hyderabad18 March 2026AY 2017-1818 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal decided on several components of the disputed addition. It held that the Rs. 15,00,000/- loan obtained from Andhra Bank on November 30, 2016, was duly explained by documentary evidence, and directed its deletion. Regarding the Rs. 35,00,000/- loan from Mr. Khader Basha, the Tribunal found that while bank statements showed withdrawals and corresponding deposits, the assessee failed to establish the lender's capacity and the loan's present status. Therefore, this issue was restored to the AO for verification of creditworthiness and fresh adjudication. The explanation for Rs. 3,28,050/- from the sale of a motor car was rejected because the car was never registered in the assessee's name, and the source of funds for its purchase was not established; thus, the addition was confirmed. For the Rs. 7,00,000/- loan from Mr. Suban Basha, the Tribunal noted that while IT return acknowledgements were filed, they did not establish identity, genuineness, or creditworthiness. This issue was also restored to the AO for fresh adjudication after providing the assessee an opportunity to substantiate the claim. The issue concerning the sale of lands by the assessee's wife was also restored to the AO. The Tribunal expressly left undecided the specific amounts related to the sale of lands by the wife and the balance from accumulated savings, as these were part of the issues restored to the AO.

What were the facts?

The assessee, Abdul Salam Shaik, is appealing an order by the CIT(A), NFAC, Delhi, for Assessment Year 2017-18. The Assessing Officer (AO) had made an addition of Rs. 1,11,98,860/- to the assessee's income, treating the entire investment in a Bangalore property as unexplained. This investment comprised the property cost of Rs. 1,05,05,000/- and stamp duty of Rs. 6,93,860/-. The AO's action followed scrutiny of cash deposits totaling Rs. 62,26,000/- in the assessee's bank accounts and the property purchase. The CIT(A) granted partial relief, leading to the current appeal before the ITAT concerning a remaining addition of Rs. 1,02,28,860/-. The AO had initially completed the assessment under section 143(3) on December 3, 2019, determining total income at Rs. 1,15,12,680/-.

What were the issues?

1. Whether the addition of Rs. 1,02,28,860/- made by the AO and sustained by the CIT(A) for unexplained investment in immovable property is justified, considering the assessee's claim that the investment was made from explained sources, as per Section 69 of the Income Tax Act, 1961? Assessee's Contention: The assessee argued that the entire investment was sourced from identifiable and explained sources, including sale proceeds of properties owned by the assessee and his wife, mortgage loans, loans from relatives and friends routed through banking channels, sale consideration of a vehicle, and accumulated savings. They contended that the authorities below erred in rejecting these evidences on technical grounds and violated principles of natural justice by not affording adequate opportunity. They relied on the principle that once identity, genuineness, and creditworthiness are established, additions under Section 68/69 cannot be sustained. Revenue's Contention: The judgment does not explicitly record the revenue's arguments. However, the AO's actions and the CIT(A)'s partial confirmation suggest the revenue contended that the sources provided by the assessee were not sufficiently substantiated to meet the requirements of the Act.

Which sections of the Income-tax Act were involved?

Section 69,Section 143(3),Section 68,Section 250

AI-generated summary — verify with the full judgment below

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

Before: SHRI VIJAY PAL RAO & SHRI MADHUSUDAN SAWDIA

For Appellant: Shri Krishna Moorthy K, Sr. AR

PER MADHUSUDAN SAWDIA, A.M.:

This appeal is filed by Shri Abdul Salam Shaik (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”) dated

28/06/2025 for the Assessment Year (“A.Y.”) 2017-18. 2. The assessee has raised the following grounds of appeal:

1.

The learned Commissione

The order continues below.

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