GOTTIMUKKALA VIDYA LATHA,VIJAYAWADA vs. ITO, WARD-1(1), VIJAYAWADA

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ITA 440/VIZ/2025Status: DisposedITAT Visakhapatnam07 November 2025AY 2017-186 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Ld. CIT(A) had rightly granted relief for Rs. 65 Lakhs based on cash withdrawals from earlier years. Regarding the Rs. 5 Lakhs addition, the Tribunal referred to CBDT Instruction No. 3/2017, which states that for individuals (other than minors) not having business income, no further verification is required if total cash deposits are up to Rs. 2.5 Lakhs, and for individuals above 70 years, the limit is Rs. 5 Lakhs per person. The instruction clarifies that sources of such amounts can be household savings or savings from past income. The Tribunal noted that the assessee's father owns agricultural lands and the submission was that the Rs. 5 Lakhs was in possession as cash in hand, earned from agricultural operations during earlier assessment years. As this amount was within the specified limits as per CBDT Instruction No. 3/2017, the Tribunal directed the AO to delete the addition of Rs. 5 Lakhs. The grounds raised by the assessee were allowed.

What were the facts?

The assessee, Gottimukkala Vidya Latha, filed her return of income for Assessment Year 2017-18 admitting a total income of Rs. 5,060/-. Her case was selected for limited scrutiny concerning cash deposits during the demonetization period. The Assessing Officer (AO) noted deposits of Rs. 65 Lakhs on 28.11.2016 and Rs. 5 Lakhs on 19.12.2016. The assessee explained the Rs. 65 Lakhs deposit as withdrawals from her bank account on 09.10.2014, which she claimed was compensation from the Government of Andhra Pradesh. The Rs. 5 Lakhs deposit was explained as cash received from her mother, Smt. Kantamma. The AO added Rs. 70 Lakhs under section 69A read with section 115BBE of the Income Tax Act, 1961. The Commissioner of Income Tax (Appeals) [CIT(A)] deleted the addition of Rs. 65 Lakhs but sustained the addition of Rs. 5 Lakhs.

What were the issues?

1. Whether the addition of Rs. 5 Lakhs sustained by the Ld. CIT(A) is erroneous and prejudicial to the assessee, considering the amount was received from Smt. Divi Kanthamma, the assessee's mother, who possessed substantial agricultural land and derived income. Assessee's Contention: The assessee argued that she received Rs. 5 Lakhs from her mother, Smt. Divi Kantamma, out of agricultural income earned by her mother. The assessee had previously transferred Rs. 6,20,000/- to her mother on 27.07.2014, which was returned during the demonetization period and utilized for the deposit. An affidavit was submitted, and it was also stated that the assessee's father owns agricultural land, and the income derived was utilized for cash deposits. Revenue's Contention: The Revenue contended that the assessee had not produced any evidence regarding the earning of agricultural income, only land holding documents, thus the genuineness of the income could not be believed. Therefore, the addition made by the AO should be sustained.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 143(3),Section 142(1),Section 133(6),Section 131

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM

Before: SHRI RAVISH SOOD, HON’BLE

For Appellant: Smt. Sandhya Samudrala, Advocate
For Respondent: Dr. Aparna Villuri, Sr.AR
Pronounced: 07.11.2025

आदेश /O R D E R

PER SHRI S. BALAKRISHNAN, ACCOUNTANT MEMBER:

1.

This appeal is filed by the assessee against the order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal centre, Delhi [hereinafter in short “Ld.CIT(A)”] vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1076576295(1) dated 30.05.2025 for the I.T.A.No.440/VIZ/2025 Gottimukkala Vidya Latha A.Y.2017-18 arising out of order passed under section 143(3) of Income Tax Act, 1961 (in short ‘Act’) dated 14.12.2019.

2.

Briefly stated facts of the case are, assessee filed return of income for the A.Y. 2017-18 on 21.12.2017 admitting a total income of Rs.5,060/-. The case was selected for limited scrutiny through CASS on the issue of “cash deposits during demonetization period”. Notice under section 143(2) and 142(1) of the Act were issued and served on the assessee calling for information. During the course of assessment proceedings notice under section 133(6) of the Act was addressed to the bankers for obtaining account statements and details of Specified Bank Notes deposited by the assessee during the demonetization period. It was noticed that assessee has deposited Rs.65 Lakhs in Specified Bank Notes on 28.11.2016 and Rs.5 Lakhs on 19.12.2016 in the Andhra Bank. Thereafter, summons under section 131 of the Act was issued on 04.10.2019 to ascertain the sources for cash deposits. In response, assessee’s husband appeared and replied that assessee had withdrawn Rs.65 lakhs from her bank account held with HDFC Bank, Krishna Nagar Branch, Vijayawada on 09.10.2014 which is out of compensation received from Government of Andhra Pradesh and the cash is deposited in during the demonetization period is out of such withdrawals. Ld.AO did not accept the explanation of the assessee disbelieving that cash withdrawn on 09.10.2014 was held for two years by the assessee and deposited on 28.11.2016. Further, assessee also submitted that Page. No 2

I.T.A.No.440/VIZ/2025 Gottimukkala Vidya Latha Rs.5 lakhs deposited on 19.12.2016 represents the cash received from Smt.Kantamma (Mother of the assessee). Ld. AO thereafter proceeded to make an addition of Rs.70 Lakhs under section 69A r.w.s. 115BBE of the Act in the hands of the assessee.

3.

On being aggrieved by the order of the Ld. AO, the assessee carried the matter in appeal before Ld. CIT(A). Before Ld. CIT(A), assessee reiterated the submissions made before the Ld. AO. The Ld. CIT(A) deleted the addition of Rs.65 lakhs but however sustained the addition of Rs.5 lakhs made by the Ld.AO thereby partly allowed the appeal of the assessee.

4.

The assessee being aggrieved by the order of the Ld. CIT(A), filed an appeal before the Tribunal by raising following grounds of appeal: -

1) The order of learned CIT (A) is erroneous to the extent it is prejudicial to the appellant; 2) The learned CIT (A) ought to have considered the fact that an amount of Rs. 5,00,000/- was received from Smt. Divi Kanthamma, mother of the appellant who possessed substantial agricultural land and derived income: 3) The learned CIT (A) ought to have considered the fact that she confirmed the fact that she provided the amount of Rs.5 lakhs to the appellant herein and that she explained the sources for providing su amount of Rs. 5,00,000/-. 4) Any other ground/grounds that may be urged at the time of hearing.”

5.

The only issue emanating from the grounds of appeal is with respect to sustaining the addition of Rs.5 lakhs by the Ld. CIT(A). On this issue,

Page. No 3

I.T.A.No.440/VIZ/2025 Gottimukkala Vidya Latha Ld.Authorised Representative [hereinafter “Ld.AR”] submitted that assessee received an amount of Rs.5 Lakhs from Smt. Divi Kantamma (Mother of the assessee) out of the agricultural income earned by Smt. Divi Kantamma. She submitted that the assessee transferred Rs.6,20,000/- on 27.07.2014 to her mother Smt. Divi Kantamma which was returned by assessee’s mother during the demonetization period which was utilized for depositing into the bank account on 19.12.2016. She submitted that an affidavit in this respect has been submitted before Ld. CIT(A). Further she also submitted that the assessee father Shri Divi Malyadri owns 11 Acres of agricultural land and the income derived from such land was utilized for the purpose of making cash deposits. She therefore pleaded that addition be deleted.

6.

Per contra, Ld. Departmental Representative [hereinafter in short “Ld.DR”] relied on the orders of the Revenue Authorities and submitted that the assessee has not produced any evidences with regarding to earning of agricultural income but has submitted only land holding documents. Therefore, the genuineness of the income cannot be believed and hence addition made by the Ld. AO be sustained.

7.

We have heard both the sides and perused the material available on record. It is an admitted fact that the Ld. CIT(A) has granted relief to the extent of Rs.65 lakhs based on the cash withdrawals made by the assessee during the earlier year and deposited during the demonetization period. Further,

Page. No 4

I.T.A.No.440/VIZ/2025 Gottimukkala Vidya Latha Ld.CIT(A) also observed that assessee has not submitted any evidences in support of the income received from agricultural operation and hence sustained the made by the Assessing Officer for Rs.5 lakhs. However, the CBDT in Instruction No. 3/2017 dated 21.02.2017 clearly states in Para No. 1.1 as follows: -

"1.1 In case of an individual (either than minors) not having any business income, no further verification required to be made if total cash deposit is up to Rs.2.5 lakh. In case of taxpayers above 70years age, the limit is Rs.5 lakh per person. The source of such amount can be either household savings/ savings from past income or amounts claimed to have been received from any of the sources mentioned in Paras 2 to 6 below. Amounts above this cut-off may require verification to ascertain whether the same is explained or not. The basis for verification can be income earned during past years and its source, filing of ROI and income shown therein, cash withdrawals made from accounts etc."

8.

There is no dispute on the fact that assessee’s father owns agricultural lands. The only contention of the Revenue Authorities is that the genuineness of the income received from agricultural operations was not established by the assessee beyond doubt. The above CBDT Instruction No. 3/2017 (supra) clearly supports the view that the sources of amounts from house hold savings and savings from past income subject to the limits specified do not require verification. In the instant case, it is the submission of the assessee that at the relevant point of time in possession of cash in hand amounting to Rs.5 lakhs which is stated to be earned out of the agricultural operations during the earlier assessment years and the impugned assessment year. As amount is within the specified limits vide CBDT Instruction 3/2017 (supra) we have no hesitation to Page. No 5

I.T.A.No.440/VIZ/2025 Gottimukkala Vidya Latha direct the Ld. AO to delete the addition of Rs.5 lakhs in the backdrop of aforesaid observations. Accordingly, grounds raised by the assessee is allowed.

9.

In the result, appeal of the assessee is allowed.

Order pronounced in the open court on 07th November, 2025.

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