Razia Begum Mohammad Vs ITO (ITAT Hyderabad)
Disclosed Rental Receipts Can’t Be Taxed u/s 69A: Hyderabad ITAT Deletes Balance Addition
The Hyderabad ‘SMC’ Bench of the ITAT, in Razia Begum Mohammad vs ITO (ITA No. 1645/Hyd/2025, AY 2017-18), deleted the residual addition of ₹91,090 u/s 69A, holding that the same represented rental income already disclosed in the return of income.
During scrutiny assessment, the AO noticed cash deposits/credits aggregating to ₹5.91 lakh in the Assessee’s bank account during the demonetisation period (09.11.2016 to 31.12.2016) and treated the entire amount as unexplained u/s 69A. In first appeal, the CIT(A) granted relief of ₹5 lakh (SBN deposits) but sustained addition of ₹91,090 treating it as unexplained credit entries.
The Tribunal, on perusal of the bank statements, found that the credit entries of ₹91,090 comprised periodic rental receipts from Andhra Pradesh Grameena Vikas Bank and Sri Ram Transport Finance Co. Ltd., which were duly reflected in the return of income along with TDS credit. Once the income stood disclosed and taxed under the appropriate head, there was no justification to invoke section 69A.
Accordingly, the ITAT vacated the addition of ₹91,090 and allowed the appeal in full, without examining the alternative plea relating to taxability u/s 115BBE.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
The present appeal filed by the assessee is directed against the order passed by the Additional/Joint Commissioner of Income Tax (Appeals)-1, Pune, dated 26/09/2025, which in turn arises from the order passed by the Assessing Officer (for short, “AO”) under section 143(3) of the Income Tax Act, 1961 (for short, “the Act”), dated 27/11/2019 for the Assessment Year (AY) 2017-18. The assessee has assailed the impugned order passed by the CIT(A) on the following grounds of appeal:
“1) The order of the learned CIT (A) is erroneous to the extent it is prejudicial to the appellant herein;
2) The learned CIT (A) erred in confirming the action of the Assessing Officer in confirming an addition of Rs.91,090/- out of Rs.5,91,090/-made by the Assessing Officer,
3) The learned CIT (A) ought to have considered the fact that the appellant explained the deposits made into the bank account and. therefore, no part of the amount can be treated as the income assessable u/s 69A of the I.T. Act;
4) Without prejudice, the learned CIT (A) ought to have held that the income is below the taxable minimum and is not taxable:
5) Without prejudice to any of the contentions the income, if any, is taxable at 30% and cannot be taxed at 60%;
6) Any other ground/grounds that may be urged at the time of hearing:”
3. Succinctly stated, the assessee had filed her return of income for AY 2017-18 on 08/10/2017, declaring an income of Rs.5,66,950/-. Subsequently, the case of the assessee was selected for scrutiny assessment under Computed Aided Scrutiny Selection (CASS).
4. During the course of the assessment proceedings, the AO observed that there were cash deposits/credits aggregating to Rs.5,91,090/- in the assessee’s bank account No.1817501333 held with Andhra Pradesh Grameena Vikas Bank, Sangarddy Branch during the demonetization period, i.e., 09/11/2016 to 31/12/2016, viz., (i) cash deposits in Specified Bank Notes (SBN): Rs.5,00,000/-; and (ii) credit entries: Rs.91,090/-. As the assessee failed to come forth with any plausible explanation regarding the source of the aforesaid cash deposits/credit entries, therefore, the AO made an addition of the entire amount of Rs.5,91,090/- under section 69A of the Act.
5. Aggrieved, the assessee carried the matter in appeal before the CIT(A).
6. The CIT(A) after considering the explanation of the assessee though vacated the addition of Rs.5,00,000/-, but sustained the addition of the unexplained credit entries of Rs.91,090/- and partly allowed the appeal.
7. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us.
8. We have heard the Learned Authorized Representatives of both parties, perused the orders of the lower authorities and the material available on record.
9. Mrs. Sandhya, Advocate, the Learned Authorized Representative (for short, “Ld. AR”) for the assessee, at the threshold of hearing of the appeal submitted that the CIT(A) had grossly erred in sustaining the addition of Rs.91,090/-, which pertain to the rental income that was received by the assessee and was fully disclosed in her return of income for the subject year. The Ld. AR to buttress her contention had taken us through the copy of the bank account of the assessee.
10. Per contra, Shri T. Venkanna, the Learned Senior Departmental Representative (for short, “Ld. Sr. DR”) relied upon the orders of the authorities below.
11. We have given thoughtful consideration to the contentions of the Ld. AR in the backdrop of the orders of the lower authorities. Ostensibly, a perusal of the Savings Bank Account No.1817501333 held by the assessee with Andhra Pradesh Grameena Vikas Bank, Sangareddy Branch, reveals the credit entries aggregating to Rs.91,090/- spread over the period 09/11/2016 to 31/12/2016, Page No.33of APB. However, on a careful perusal of the subject credit entries, we find that the same are the rental receipts of the assessee that have duly been disclosed by her in the return of income for the subject year. For the sake of clarity, we cull out the credit entries along with an explanation of the same as can be gathered from the record before us.
| Sl No | Date | Amount (Rs.) | Particulars |
|---|---|---|---|
| 1 | 30/11/2016 | 19,350 | Rent received from Andhra Pradesh Grameena Vikas Bank |
| 2. | 30/11/2016 | 26,195 | Rent received from M/s. Sri Ram Transport Finance Company Limited |
| 1. | 13/12/2016 | 26,195 | Rent received from M/s. Sri Ram Transport Finance Company Limited |
| 2. | 31/12/2016 | 19,350 | Rent received from Andhra Pradesh Grameena Vikas Bank |
| Total | 91,090 |
12. We find that the assessee had filed her return of income for the AY 2017-18 vide acknowledgement No.235232250081017 on 08/10/2017, declaring an income of Rs.5,66,950/-, wherein the aforesaid rental income received from the aforementioned parties, viz., (i) M/s. Sri Ram Transport Finance Company Limited; and (ii) Andhra Pradesh Grameena Vikas Bank had duly been disclosed along with the claim for credit of the tax deducted at source by the said respective parties, Page No. 6-7of APB.
13. We, thus, considering the fact that the credit entries of Rs. 91,090/-, had duly been disclosed by the assessee as a part of her rental receipts in her return of income for the subject year, therefore, there is no justification for the AO to have made an addition of the same much the less under section 69A of the Act. Accordingly, the addition of Rs.91,090/- sustained by the CIT(A) is vacated.
14. As we have vacated the impugned addition made by the AO, therefore, we refrain from adverting to the other grounds based on which the applicability of the post-amended provisions of section 115BBE of the Act to the impugned addition has been assailed before us.
15. Resultantly, the appeal filed by the assessee is allowed in terms of our aforementioned observations.
Order pronounced in the open court on 19th December, 2025.
