KONATHALA NOOKU NAIDU,ANAKAPALLE vs. THE INCOME TAX OFFICER, WARD-1, , ANAKAPALLE

आयकर अपीलीयअधिकरण, विशाखापटणम SMC पीठ, विशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री दुव्िूरु आर एल रेड्डी, न्याययक सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER आयकर अपील सं./ (निर्धारण वर्ा / Assessment Year : 2017-18) Konathala Nooku Naidu, Vs. The Income Tax Officer, Anakapalle. Ward-1, PAN: ACZPN 4551 C Anakapalle. (अपीलधर्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधर्थी की ओर से/ Appellant by : Sri GVN Hari, AR प्रत्यधर्थी की ओर से / Respondent by : Dr. Aparna Villuri, Sr. AR सुिवधई की तधरीख / Date of Hearing : 12/03/2024 घोर्णध की तधरीख/Date of : 18/03/2024 Pronouncement O R D E R PER DUVVURU RL REDDY, Judicial Member :

This appeal is filed by the assessee is against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [Ld. CIT(A)-NFAC] in DIN & Order No. ITBA/NFAC/S/250/2023-24/1055591804(1), dated 30/08/2023 arising out of the order passed U/s. 143(3) of the Income Tax Act, 1961 [the Act] for the AY 2017-18. 2 2. Briefly stated the facts of the case are that the assessee is an individual filed his return of income for the AY 2017-18 on 23/01/2018 declaring a total income of Rs. 5,28,089/- under ‘Short Term Capital Gains’ [STCG] and ‘other sources’. Subsequently, the case was selected for Limited Scrutiny under CASS to examine the cash deposits made by the assessee during the demonetization period and the claim of exemption of agricultural income. Subsequently, a notice U/s. 143(2) was issued on 15/08/2018 and duly served on the assessee. Thereafter, notice U/s. 142(1) of the Act was issued on 17/7/2019 and called for certain information. In response, the assessee furnished the information as called for. During the course of assessment proceedings, the assessee was asked to explain the sources for cash deposits of Rs. 25,40,000/- made in ICICI Bank account of the assessee. In reply, the assessee submitted that he is engaged in purchase and sale of small sites (real estate) situated in Anakapalli area. Further, the assessee submitted that the alleged cash deposit was made out of the cash balance of Rs. 27,39,364/- as on 1/11/2016. In support of his claim the assessee also submitted cash book and confirmation letters. On perusal and verification of the submissions made by the assessee, the Ld. AO came to a conclusion that the assessee is not having appropriate 3 source to deposit cash of Rs. 25,40,000/- in his bank account. Accordingly, the Ld. AO treated the cash deposit of Rs. 25,40,000/- as unexplained cash in the hands of the assessee and made addition by invoking the provisions of section 69A of the Act. Thus, the Ld. AO determined the assessed income at Rs. 30,68,089/- and completed the assessment U/s. 143(3) of the Act vide order dated 26/12/2019. Aggrieved by the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A)-NFAC. On appeal, the assessee made various submissions before the Ld. CIT(A)-NFAC but the Ld. CIT(A)-NFAC did not consider the assessee’s submissions and dismissed the appeal of the assessee. Aggrieved by the order of the Ld. CIT(A)-NFAC, the assessee is in appeal before the Tribunal by raising the following grounds of appeal:

1. The order of the Ld. CIT(A) is contrary to the facts and also the law applicable to the facts of the case. 2. The Ld. CIT(A) is not justified in sustaining the addition of Rs. 25,40,000/- made by the Assessing Officer U/s. 69A of the Act towards alleged unexplained cash deposits in the bank account. 3. Any other grounds may be urged at the time of hearing.

3. At the outset, the Ld. Authorized Representative [AR] submitted that the cash deposited by the assessee in his ICICI bank account is nothing but sale consideration of sites / land. The 4 Ld. AR also submitted that the assessee has filed an agreement of sale before the Ld.AO as well as the Ld. CIT(A)-NFAC but the Ld. Revenue Authorities have not considered the same. The Ld. AR also submitted that the purchaser has also given the confirmation letter stating that he has entered into an agreement of sale with the assessee and paid an amount of Rs. 30 lakhs as an advance. Further, the Ld. AR submitted that the said advance amount was also recorded in the books of account of the assessee. But, without considering the said facts, the Ld. Revenue Authorities have arbitrarily made an addition of Rs. 21,50,000/-. Out of the remaining balance amount, insofar as Rs. 2.60 lakhs is concerned, the assessee has availed loan from the bank and withdrawn the loan amount and deposited the same during the demonetization period. In so far as Rs. 90,000/- is concerned, the assessee held this amount as cash on hand to meet the petty expenses and deposited the same during the demonetization period. Insofar as Rs. 40,000/- is concerned, it is nothing but exchange of old notes and the assessee deposited and withdrawn the same on the same date. Therefore, the Ld. AR pleaded that the source of the cash deposits are clearly established by the assessee and hence the addition made by the Ld. Revenue Authorities may be deleted.

5 4. Per contra, the Ld. Departmental Representative [DR] strongly relied on the orders of the Ld. Revenue Authorities. The Ld. DR also argued that the assessee has not properly explained the source of cash deposits and in the agreement of sale, the purchaser has not signed but he filed the confirmation letter and therefore the Ld. AO and the Ld. CIT(A)-NFAC have not considered the same. The Ld. DR pleaded to uphold the orders of the Ld. Revenue Authorities.