Usha Rani Talla Vs ITO (ITAT Hyderabad)
Hyderabad ITAT Deletes ₹12.69 Lakh Demonetisation Cash Addition: Bank Statements Are Independent Third-Party Evidence and Cannot Be Disregarded
The assessee had not filed a return of income for the year. Based on information regarding cash deposits of ₹12,69,522 during the demonetisation period, the AO initiated proceedings. The assessee, an agriculturist owning about 7 acres of agricultural land, explained that the deposits represented repayment of gold/jewel loans out of available cash and earlier bank withdrawals. The AO rejected the explanation and treated the entire ₹12.69 lakh as unexplained money, which was upheld by the CIT(A).
Before the ITAT, the assessee produced the relevant loan account and bank statements. These demonstrated that two loans of ₹5 lakh each were sanctioned on 16.07.2016, the amounts were immediately withdrawn in cash, and the loans were subsequently repaid by cash deposits on 17.11.2016.
The Tribunal placed particular importance on the evidentiary value of the bank statements. It held that a bank statement is independent evidence issued by a third party and is not a self-serving document prepared by the assessee; therefore, its veracity and authenticity cannot simply be disputed. The transactions in the bank statements also corresponded with the loan accounts.
On examining the records, the ITAT found that the source of both the loan repayments and the ₹2.50 lakh cash deposit stood explained from earlier bank withdrawals—particularly ₹10 lakh withdrawn on 16.07.2016 and ₹2.24 lakh withdrawn on 09.09.2016. Accordingly, the entire addition sustained by the CIT(A) was deleted and the assessee’s appeal allowed.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
This appeal by the assessee is directed against the order dated 29.09.2025 of the learned CIT(A)-National Faceless Appeal Centre [in short “NFAC”], Delhi, for the assessment year 2017-2018.
