Krishnakumar Manda Vs DCIT (ITAT Hyderabad)
Cash Deposits & Unexplained Investment Sink Assessee: Hyderabad ITAT Upholds Additions u/s 69/69A and Mandatory Penalty u/s 271AAC
Hyderabad ITAT (Bench “A”) in Shri Krishnakumar Manda vs. DCIT, Circle-12(1), Hyderabad (ITA Nos.1016 & 1017/Hyd/2025, AY 2021-22, order dated 19.12.2025) dismissed both the quantum appeal and the penalty appeal of the assessee.
In the quantum appeal, the Tribunal upheld addition of ₹38.02 lakh towards cash deposits, holding that the assessee failed to prove that the deposits were out of earlier withdrawals; bank statements clearly showed no prior cash withdrawals, justifying treatment as unexplained money u/s 69A. Addition of ₹13.20 lakh towards house-property investment was also sustained, as the assessee could not substantiate the claim of past savings with any cash-flow or documentary evidence, warranting addition u/s 69. The Tribunal further approved CIT(A)’s action of remanding issues relating to Chapter VI-A deduction, interest u/s 24(b) and capital gains for verification, since evidences were produced for the first time at appellate stage.
In the penalty appeal, the Tribunal held that once additions under sections 69 and 69A are sustained and income is taxed u/s 115BBE, penalty u/s 271AAC(1) becomes mandatory. As the assessee had neither disclosed such income in the return nor paid tax thereon within the prescribed time, immunity under the proviso to s.271AAC(1) was unavailable. The plea of reasonable cause was rejected, noting that section 273B does not apply to penalty u/s 271AAC. Consequently, penalty of ₹3.99 lakh was confirmed.
Accordingly, both appeals of the assessee were dismissed.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
