Jayakrishna Nandamuri Vs DCIT (ITAT Hyderabad)
The appeal concerns the addition of ₹23,53,750 as unexplained investment under Section 69B of the Income Tax Act for Assessment Year 1996–97. The assessee challenged the order of the first appellate authority, which had confirmed the addition made by the Assessing Officer (AO).
The case originated when the AO received information that cash payments totaling ₹23,53,750 had been made for the purchase of jewellery from a Coimbatore-based jeweller. Based on this, the AO reopened the assessment under Section 147 and completed reassessment under Section 143(3) read with Section 147, treating the amount as unexplained investment.
In earlier proceedings, the Tribunal and the High Court directed the AO to examine the jeweller and provide an opportunity for cross-examination. Accordingly, the jeweller’s statement was recorded, and the assessee was given an opportunity to cross-examine him. After considering the statement, cross-examination, and submissions, the AO again made the addition, which was subsequently upheld by the first appellate authority.
Before the Tribunal, the assessee contended that the jewellery was purchased by his daughter through his Personal Assistant (PA), and that the source of funds had been fully explained through withdrawals from bank accounts and marriage gifts received by the daughter. It was argued that no evidence showed that the assessee directly paid for or received the jewellery, and that the addition was based on suspicion. The assessee also relied on statements made by the jeweller during cross-examination, where he confirmed that the assessee neither personally paid for nor received the jewellery.
