ITAT Chennai Deletes ₹1.25 Crore Section 69A Addition as Assessee Acted Only as Power Agent

Duraisamy Victor Vs ITO (ITAT Chennai)

Money Received as Power of Attorney Holder Cannot Become the Agent’s Unexplained Income: Chennai ITAT Deletes ₹1.91 Crore Addition

When a power of attorney holder collects money for the owners of a property and passes it on at their direction, can the entire amount be taxed as his own unexplained money under section 69A? The Chennai Tribunal answered this question in favour of the assessee after tracing the transaction through the purchasers, the property owners and the ultimate recipient. It also deleted a separate addition for ₹66 lakh of cash deposits, holding that the assessee had explained their sources.

The two additions together amounted to ₹1.91 crore.

The property transaction and the ₹1.25 crore addition

The assessee, Duraisamy Victor, carried on business as a general commission agent under the name Victory Traders. For AY 2017–18, he declared income of approximately ₹22.32 lakh. His assessment was reopened after the Department received information that he had collected ₹1.25 crore in cash from three persons in connection with a property transaction. It had also noticed ₹66 lakh deposited in his bank account.

The assessee explained that he held a registered General Power of Attorney dated 17 April 1996 from the owners of land at Kodambakkam, Chennai. The power of attorney expressly authorised him to receive sale advances and consideration on the owners’ behalf, issue receipts and account to them. It also recorded that he had paid no consideration for obtaining the power of attorney.

Three purchasers paid the disputed ₹1.25 crore in connection with the Kodambakkam property. According to the assessee, the owners then instructed him in writing to hand over those sums to Nalini Selvaraj as an advance towards their proposed purchase of her property at Porur. The money was thus collected and passed on by him as an agent, rather than retained as his own.

The AO rejected this explanation. One reason was that Nalini Selvaraj’s receipt stood in the assessee’s name. The AO treated ₹1.25 crore as the assessee’s unexplained money under section 69A. The CIT(A) agreed, also referring to the absence of a written agreement for the Porur purchase and perceived inconsistencies in the documents.

The Tribunal followed the money

The Tribunal examined the registered power of attorney, sale agreement, written authorisation, confirmations and receipt acknowledgment. It found a date-wise match across sixteen occasions: each amount collected from the purchasers was handed over to Nalini Selvaraj on the same day. Her later declaration confirmed that she had received the money from Victor on behalf of the three property owners, although the receipt had been issued in his name.

The Tribunal also noted that the persons on both sides of the transaction were identified taxpayers. The three purchasers and the three owners had PANs and had filed returns for the relevant assessment year. The recipient of the advance, Nalini Selvaraj, was herself assessed to tax.

More importantly, the Department had already examined parts of the same transaction in other assessments. During Nalini Selvaraj’s scrutiny assessment, the officer enquired into the source of the ₹1.25 crore. Victor appeared and supplied the purchasers’ confirmations, returns and financial statements. After that enquiry, no addition was made in her hands in respect of this amount.

In a separate assessment of one of the purchasers, K. Muthukannan, the Department recorded that he and the other two purchasers had entered into the Kodambakkam property agreement with Victor as power agent for the owners. It also treated Muthukannan’s ₹39 lakh share of the money as unexplained in his hands. Yet five days later, the same ₹39 lakh formed part of the ₹1.25 crore assessed as Victor’s unexplained money. The Tribunal found that the Revenue could not take these contradictory positions on the same transaction.

A receipt in the agent’s name was not decisive

The CIT(A) had placed weight on the absence of a written purchase agreement with Nalini Selvaraj. The Tribunal held that this might concern the enforceability of the proposed transaction between the relevant parties. It could not turn money received by an agent and paid over on the same day into the agent’s personal income.

The authorities had also not summoned the identified parties to test their confirmations or conducted an independent enquiry showing that the documents were false. On the evidence before it, the Tribunal concluded that Victor had acted only as a power agent. It therefore deleted the ₹1.25 crore addition.

The separate ₹66 lakh bank deposits

The AO had also treated ₹66 lakh deposited in the assessee’s SBI account in July 2016 as unexplained money. Victor submitted a source statement referring to his earnings, accumulated earnings of earlier years and ₹37 lakh received from the estate of his late brother. He placed his capital account, financial statements, return and an affidavit relating to the estate on record.

The CIT(A) questioned how income earned over the year could explain deposits made in July and rejected the affidavit for want of further support. The Tribunal observed that the authorities had not tested the affidavit: they had neither summoned the relevant persons nor obtained contrary material. Considering the explanation and records as a whole, it held that the assessee had discharged his initial burden. The ₹66 lakh addition was also deleted.

Author’s comments

This decision illustrates why receipt or physical handling of money is not, by itself, proof of beneficial ownership. In a property transaction conducted through a power of attorney holder, the authority granted to the agent, the identity of the principals and purchasers, and the actual movement of funds are crucial. Here, the Tribunal found not just an explanation, but a sixteen-date trail showing receipt and onward payment of matching amounts.

The Revenue’s own records proved equally important. Once the Department had examined the source in the recipient’s assessment and recognised Victor’s role as a power agent in a purchaser’s assessment, it needed cogent evidence before treating the same money as Victor’s unexplained income.

The Tribunal also recorded that the enhanced section 115BBE rate introduced by the 2016 amendment was not attracted to AY 2017–18. Since both section 69A additions had been deleted, however, no amount remained on which to apply that rate. The other challenges to the reassessment were left open, as their adjudication was unnecessary after the assessee succeeded on merits.

Cases Discussed

• Controller of Court of Ward, Kolhapur and Anr. v. G.N.Ghorparde & Ors. AIR 1973 SC 627 — Relied upon; an uncontroverted affidavit shall be taken as an affidavit on fact.

FULL TEXT OF THE ORDER OF ITAT CHENNAI

This appeal filed by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [hereinafter referred to as “the CIT(A)”] dated 29.01.2026, passed u/s.250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the Assessment Year 2017-18, arising out of the order of reassessment dated 29.03.2022 passed u/s.147 r.w.s 144B of the Act by the Assessment unit, National Faceless Assessment Centre, Delhi (AO).

2. The assessee has raised the following grounds of appeal:

1. The order of the NFAC, Delhi dated 29.01.2026 vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1085304184(1) for the above-mentioned Assessment Year is contrary to law, fact and in circumstances of the case.

2. The NFAC, Delhi erred in impliedly confirming the assumption of jurisdiction under Section 147 of the Act and consequently erred in impliedly confirming the passing of the re-assessment order under Section 147 of the Act without assigning proper reasons and justification.

3. The NFAC, Delhi failed to appreciate that the re-assessment order was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law.

4. The NFAC, Delhi failed to appreciate that the assumption of jurisdiction under Section 147 of the Act was without sanction of law and ought to have appreciated that the consequential re-assessment order accordingly should be reckoned as bad in law.

5. The NFAC, Delhi failed to appreciate that having not followed the prescription of law/procedure for framing the re-assessment, the consequential re-assessment order passed should be reckoned as nullity in law for want of jurisdiction.

6. The NFAC, Delhi erred in sustaining the addition to the tune of Rs.1,25,00,000/- being the sale consideration received in the capacity of the Power of Attorney holder of Mr. D. Paulsingh, Mr. R. Kannan & Mr. M. Veerachamy for sale of their immovable property and paid as advance for purchase of immovable property from Mrs. Nalini Selvaraj on behalf of such individuals as unexplained money of the appellant in terms of Section 69A of the Act without assigning proper reasons and justification.

7. The NFAC, Delhi erred in sustaining the addition to the tune of Rs.66,00,000/- being the cash deposits made by the appellant in the bank account maintained with State Bank of India as unexplained money of the appellant in terms of Section 69A of the Act without assigning proper reasons and justification.

8. The NFAC, Delhi failed to appreciate that provisions of Section 69A r.w.s. 115BBE of the Act had no application to the present facts and ought to have appreciated that the pre-requisite conditions required for making an addition in terms of Section 69A of the Act were absent in the present case, there by negating the findings in relation thereto.

9. The NFAC, Delhi failed to appreciate that in any event provisions of Section 115BBE of the Act had no application in view of the law declared by the Madras High Court on its applicability from Assessment Year: 2018–19 only, there by negating the findings in relation thereto.

10. The NFAC, Delhi failed to appreciate that placed on record the identity, genuineness and creditworthiness of the sums received in the capacity of Power of Attorney holder of 3 other individuals for execution of sale and further having substantiated the fact of payment of such sums as advance for purchase of immovable property from Mrs. Nalini Selvaraj on behalf of such individuals, the presumption of unexplained money should be reckoned as wholly unjustified and not sustainable in law.

11. The NFAC, Delhi failed to appreciate that having not disputed the nature and source of such sums received during course of being a Power of Attorney Holder for 3 other individuals as well as the confirmation from Mrs. Nalini Selvaraj, the presumption of unexplained money within the scope of Section 69A of the Act was wrong, erroneous, incorrect, invalid, unjustified and not sustainable both on facts and in law.

12. The NFAC, Delhi failed to appreciate that having placed on record the source for the cash deposits with cogent explanation and documentary evidence in support there of, the sustenance of the disputed addition unexplained money in terms of Section 69A of the Act in the hands of the appellant was wrong, erroneous, incorrect, invalid, unjustified and not sustainable both on facts and in law.

13. The NFAC, Delhi failed to appreciate that in any event having not independently examined the nature and source of the sums received / deposits by the appellant, the consequential sustenance of the entire addition as unexplained money in terms of Section 69A of the Act was wrong, erroneous, incorrect, invalid, unjustified and not sustainable both on facts and in law.

14. The NFAC, Delhi failed to appreciate that the entire re-computation of taxable total income was wrong, erroneous, incorrect, invalid, unjustified and not sustainable both on facts and in law.

15. The NFAC, Delhi failed to appreciate that there was no effective/proper opportunity given before passing the impugned order including non granting of personal hearing and any order passed in violation of the principles of natural justice is nullity in law.

16. The Appellant craves leave to file additional grounds/arguments at the time of hearing.

3. The brief facts of the case emanating from the records are that the assessee is an individual carrying on business as a general commission agent under the name and style of M/s.Victory Traders, Kodambakkam, Chennai. For the Assessment Year 2017-18 he filed his return of income on 31.01.2018 in Form ITR-3 declaring a total income of Rs.22,31,810/-, comprising income from house property of Rs.2,14,200/-, income from business of Rs.20,14,485/- and income from other sources of Rs.13,129/-.

4. The assessment was reopened u/s.147 of the Act on the basis of information that the assessee had received cash aggregating to Rs.1,25,00,000/- from Shri K.Muthukannan, Shri U.Ayyakannu and Shri L.Govindaraj between 19.07.2016 and 30.08.2016 in connection with a transaction in immovable property, and further had also deposited cash of Rs.66,00,000/- in his savings bank account No.11901430371 maintained with the State Bank of India, Valluvarkottam Branch, Chennai. Accordingly the notice u/s.148 of the Act was issued on 29.03.2021 and in response thereto the assessee filed his return on 29.11.2021 declaring total income of Rs.22,31,790/-. Notices u/s.143(2) and section 142(1) were followed.

5. In reply, the assessee explained that the sum of Rs.1,25,00,000/- had been received by him solely in his capacity as the holder of a registered General Power of Attorney executed in his favour on 17.04.1996 and registered as Document No.481 of 1996 in the office of the Sub-Registrar, Kodambakkam, by the owners of land at Puliyur Village, Periyar Pathai, Kodambakkam, Chennai – 600 024, comprised in T.S. No. 2, sub-divided as T.S. No. 2/2, Block No. 9, and that the sum so collected from the three purchasers had, on the written direction of his principals dated 19.07.2016, been handed over on the very same dates to Smt.Nalini Selvaraj as advance for the purchase of her property at No.16, Arcot Road, Porur, Chennai. The other issue pertain to the source for cash deposits of Rs.66,00,000/- wherein the assessee filed a source statement tracing the deposits to his own earnings of the year, to accumulated earnings of earlier years realised during the year, and to cash received from the estate of his late brother Shri D.Paulraj.

6. The AO declined to accept submission made on both issues. He observed that the receipt dated 30.08.2016 issued by Smt.Nalini Selvaraj stood in the name of the assessee and that the assessee had failed to explain the nature and source of the cash received and deposited. He accordingly treated the aggregate sum of Rs.1,91,00,000/- as unexplained money u/s.69A of the Act and completed the assessment u/s.147 r.w.s 144B on 29.03.2022 on a total income of Rs.2,13,31,810/-.

7. Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the ld.CIT(A). The ld.CIT(A) dismissed the appeal of the assessee by passing the impugned order dated 29.01.2026. In respect of the first addition he held, principally, that no written agreement for purchase of the Porur property had been produced, that the receipt stood in the assessee’s own name, and that the affidavit of the land owners dated 17.05.2015 was inconsistent with the dates of receipt. In respect of the second addition he held that income accruing over the whole year could not explain deposits made in July 2016 and that no cash book had been produced. Aggrieved by the order of the ld.CIT(A), the assessee is in appeal before us.

8. The ld.AR for the assessee assailing the action of the authorities submitted that both the AO and the ld.CIT(A) have erred in making the addition of advance received on behalf of the owner as power attorney holder in the hands of the assessee. Further, the ld.AR submitted that the assessee the cash deposits has been explained by showing the opening capital, the receipts from the estate of his late brother, the accumulated earnings of earlier years realized during the year and the current year’s income, all of which are recorded in his books and the application of those deposits to a disclosed investment in the shares of M/s.Rajam Foods Private Limited. In support of the above submission the ld.AR filed a paper book of 187 pages consisting of details of written submissions made before the ld.CIT(A), details of money flow, return of income, financials of the assessee, Power of attorney given to the assessee, confirmations of Mr.L.Govindaraj, K.Muthukuannan and U.Ayyakannu, sale agreement, Affidavit of D.Paul Singh, R Kannan and M.Veerachamy and Passbook of SBI. In view of the above submissions, the transaction of advance received clearly established that the amount received as advance belongs to Shri D.Paulsingh, Shri M.Veeraswamy and Shri R.Kannan.

9. Per contra, the ld.DR for the revenue supported the orders of the authorities and submitted that the assessee has failed to explain the transaction belongs to the other party as the advance was received in cash and also the source for cash deposit of Rs.66,00,000/-. Therefore, prayed for confirming the same.

10. We have heard the rival contentions, perused the material available on record and gone through the Paper Book filed by the assessee, the contents whereof were duly available before both the authorities below. The grounds fall into two substantive issues, which we take up in turn.

Issue No. 1 – Addition of Rs.1,25,00,000/- under section 69A (Grounds 6, 8, 10, 11 and 13):

11. The registered General Power of Attorney dated 17.04.1996, Document No.481 of 1996, was executed by seven co-owners, among them Shri D.Paulsingh, Shri M.Veeraswamy and Shri R.Kannan, in favour of the assessee in respect of vacant land measuring 12 grounds and 2,239 square feet (31,039 square feet) at Puliyur Village, Periyar Pathai, Kodambakkam referred to as Kodambakkam Property. Three of its clauses are material.

12. By clause 4 the assessee was empowered:

“To receive, admit and acknowledge receipt of advances, entire sale consideration etc. in respect of the schedule mentioned property, or any flat building put up thereon, in our names and on our behalf and to issue proper receipts and discharges.”

13. By clause 11,

“The Power of Attorney Agent shall maintain a true and proper account for all the transactions done by him and render all such accounts to the Principals as and when demanded.”

14. By clause 12,

“No consideration has been passed on for execution of this Power of Attorney.”

15. The sale agreement dated 17.05.2015 records the agreement to sell the share in the said property (Kodambakkam property) relatable to Shri K.Muthukannan, Shri U.Ayyakannu and Shri L.Govindaraj for a total consideration of Rs.4,12,00,200/-. The affidavit of the three land owners and their written authorisation dated 19.07.2016 directed the assessee to hand over the advance so collected to Smt.Nalini Selvaraj towards purchase of her property at Arcot Road, Porur referred to as Porur Property. The receipt acknowledgement dated 30.08.2016 issued by Smt.Nalini Selvaraj, PAN – ABSPN9851D, acknowledges receipt of Rs.1,25,00,000/- on sixteen specified dates, and her declaration letter dated 22.03.2022 confirms that the sums were received from the assessee “on behalf of the Purchasers Mr.D.Paulsingh, Mr.R.Kannan and Mr.M.Veerachamy” and that “the receipt was issued in the name of Mr.D.Victor, who handed over the advance money for the proposed sale of my property at Arcot Road, Porur.”

16. The tabulation captured in the Paper Book – I sets out, date by date, the receipt from each purchaser and the corresponding payment to Smt.Nalini Selvaraj. On every one of the sixteen occasions the sum received was paid over on the very same day, and the sixteen dates and amounts correspond exactly with the sixteen dates and amounts in the receipt of 30.08.2016.

17. The first limb of the assessee’s case is that every person in the chain was identifiable, was assessed to tax, and was a regular filer of returns. We find this to be established on the record and, indeed, to be beyond controversy.

18. Each of the three purchasers who paid the money, and each of the three principals on whose behalf it was received, holds a PAN and filed a return of income for the very Assessment Year 2017-18, copies whereof are on record in Paper Book – II:

19. To this must be added Smt.Nalini Selvaraj Jayasingh, PAN – ABSPN9851D, the recipient of the advance, was subjected to scrutiny assessment u/s.143(3) of the Act for the same Assessment Year 2017-18 by the Income Tax Officer, Corporate Ward 5(4), Chennai, by order dated 20.12.2019 which triggered the proceedings in the hands of the assessee. The three purchasers each disclosed a property advance account in their respective hands and filed their returns regularly.

20. During her scrutiny assessment for Assessment Year 2017-18, the AO called upon her to prove the source of the Rs.1.25 crore. Being not satisfied with her reply, the officer issued a notice u/s.133(6) to the present assessee on 04.12.2019 and thereafter a summons on 11.12.2019. The assessee appeared and produced his bank statement together with the confirmations of Shri K.Muthukannan, Shri L.Govindaraj and Shri U.Ayyakannu for Rs.39,00,000/-, Rs.44,00,000/- and Rs.42,00,000/- respectively, and their ITR-Vs, statements of total income, profit and loss accounts and balance sheets for the Assessment Year 2017-18. Having examined that material, the AO recorded, in terms, at paragraph 3 of the order dated 20.12.2019:

“Thus Mr. D. Victor has confirmed that he has source to advance Rs.1.25 crores to the assessee Mrs. Nalini Selvaraj.”

21. It is significant that in the same order the officer made additions of Rs.48,15,000/- u/s.68 of the Act in respect of gifts, and further additions u/s.56(2) of the Act, in the hands of Smt.Nalini Selvaraj. In relation to the Rs.1.25 crore alone, no addition was made. The source stood accepted after enquiry and the enquiry directed at the present assessee and answered by him with the very documents he has produced in these proceedings.

22. Similarly, in the assessment of Shri K.Muthukannan (one of the buyer) an order u/s.147 r.w.s 144B dated 24.03.2022 that is, five days before the order under appeal was passed on the present assessee the National Faceless Assessment Centre assessed Shri K.Muthukannan (PAN – BTKPM2222E) for the same Assessment Year 2017-18. A copy is at pages 225 to 231 of Paper Book – II. At paragraph 5 of that order the Department recorded as a finding of fact:

“During the year under consideration, assessee alongwith two other persons (Mr.U.Ayyakannu and Mr.L.Govindaraj) has entered into a purchase Agreement (dated 17.05.2015) with Mr. D. Victor (power agent of Mr.D.Paulsingh, Mr.M.Veeraswamy and Mr.R.Kannan) for the purchase of property at Puliyur Village, Kodambakkam, Chennai for a total consideration of Rs. 4,12,00,200/- …”

23. The Department has thus, in its own assessment order, had accepted that the amounts were paid by the buyers to the assessee under the sale agreement entered into in which agreement the assessee had represented the three Principals based on the Power of Attorney executed. Having so found in one proceeding, the Revenue cannot be permitted to assert the contrary in another proceedings in relation to the same transaction.

24. Further, by that same order the Department assessed the sum of Rs.39,00,000/- – being Shri K.Muthukannan’s share of the very Rs.1,25,00,000/- now in issue as unexplained money u/s.69A of the Act in his hands, holding him to be the owner of that money. Five days later it assessed the same Rs.39,00,000/-, as part of the aggregate of Rs.1,25,00,000/-, as unexplained money u/s.69A of the Act in the hands of the present assessee, holding him to be the owner of it.

25. From the above two assessment orders we note that it is the understanding of the department that that the assessee acted as a power agent for receiving money on behalf of his principal in relation to Kodambakkam Property and advance the said sum to Mrs.Nalini Selvaraj on their behalf for purchase of Porur property. In such circumstances, contradicting the said stand in the hands of the assessee for the same transaction cannot be accepted.

We deal now with the reasons on which the ld.CIT(A) rested the confirmation. One of the reasons given by the ld.CIT(A) for confirming the additions is that there is no written agreement with Smt.Nalini Selvaraj. First, the absence of a written agreement between the principals and Smt.Nalini Selvaraj is, at best a circumstance touching the enforceability of that bargain as between those parties. It cannot convert money demonstrably received by an agent and paid over by him on the same day into the agent’s own income. Further, the confirmations given by the respective parties and the treatment of such sum as sale advance in the hands of Mrs.Nalini Selvaraj negates the adverse findings recorded by the ld.CIT(A).

26. Another finding given by the ld.CIT(A) pertains to certain technical reasons and inaccuracies found in the dates specified in the affidavit filed before the authorities. As stated in the preceding paragraphs, having treated the disputed sum as paid by the purchasers (in the assessment of Mr.Muthukannan) and further treating the sum as sale advance in the hands of Smt.Nalini Selvaraj (in the assessment order passed in her case), the flow of funds through the assessee stands confirmed by the Revenue in the assessment orders referred to thereby negating the technical reasons / inaccuracies stated therein. Moreover, on the facts of the present case, the transactions are being carried out across two financial years and we do not find any inconsistency / inaccuracies in the dates captured in relation thereto.

27. We may add that neither authority made any independent enquiry of its own despite the availability of the identity of the respective parties who are filing their returns of income regularly, nor confirmation on record was tested by summoning the said parties and found to be false. The addition rests entirely on the AO’s disinclination to believe documents that the Department itself had already accepted in two other assessments.

28. Furthermore, we find that the assessee had acted only as a Power Agent and hence the disputed sums cannot be assessed as income in his hands for the assessment year under consideration. For the above reasons, we deem it fit to delete the addition of Rs.1,25,00,000/- and accordingly the ground Nos. 6, 8, 10, 11 and 13, to the extent they relate to this issue, are allowed.

29. The second addition in respect of cash of Rs.66,00,000/- deposited in savings bank account No.11901430371 with the State Bank of India, Valluvarkottam Branch, Chennai. The deposits were made between 19.07.2016 and 27.07.2016. The assessee filed before the AO a source statement which is summarized below:

30. The assessee had further placed on record, the current capital account of the proprietary concern M/s.Victory Traders for the Financial Year 2016-17, by the statement of income and financial statements, the return of income in Form ITR-3 filed on 31.01.2018, and the affidavit relating to the estate of the late Shri D.Paulraj.

31. The receipt of Rs.37,00,000/- is deposed on affidavit, which explains the cash on hand constituting the source for the cash deposits. The ld.CIT(A) declined to accept the affidavit for want of supporting evidence while however the lower authorities have not made any attempt to test the same. We note that there is no summons u/s.131 was issued to the legal representatives of the estate; no notice u/s.133(6) was issued; no deponent was called for examination. An affidavit which is not controverted by cross-examination and is not displaced by any contrary material on record cannot be discarded merely because the authority is disinclined to believe it. We draw strength from the law laid down by the Apex Court in the case of Controller of Court of Ward, Kolhapur and Anr. v. G.N.Ghorparde & Ors. AIR 1973 SC 627, held that an uncontroverted affidavit shall be taken as an affidavit on fact.

32. Furthermore, the lower authorities after looking into the above explanation have wrongly rejected the source on mere surmises and suspicion triggered due to their understanding of generation of such source of income for making deposits in the month of July 2016 and in the process, the reasonableness of the explanation offered by taking a holistic view of the said explanation should be considered be acceptable in the eyes of law for the purpose of discharging their initial burden for explaining the source for cash deposits under consideration.

33. Considering the totality of the facts in the present case, we are satisfied that the assessee has discharged the onus that lay upon him. The source of the cash deposits of Rs.66,00,000/- stands explained by the opening capital, the receipts from the estate of his late brother, the accumulated earnings of earlier years realized during the year and the current year’s income, all of which are recorded in his books; and the application of those deposits to a disclosed investment in the shares of M/s.Rajam Foods Private Limited puts the matter beyond doubt. The addition of Rs.66,00,000/- is directed to be deleted. Accordingly the ground Nos.7, 12 and 13, to the extent they relate to this issue, are allowed.

34. Since we have directed the deletion of both the additions made u/s.69A of the Act, the charge u/s.115BBE has no subject-matter left to operate upon and the ground does not survive for practical consequence. We nevertheless record, in deference to the argument advanced and consistently with the binding declaration of law referred to above, that the enhanced rate of tax introduced by the Taxation Laws (Second Amendment) Act, 2016 is not attracted to the assessment year presently before us. Ground No. 9 is accordingly allowed.

35. Since the issues on merits are decided in favour of the assessee, the other grounds raised in the present appeal requires no separate adjudication as the same would be academic and accordingly the other grounds raised in the present appeal are left open.

36. In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 22nd September, 2026 at Chennai. :chatgpt-content-reference{index=”0″}