Ramesh Kandakatla Vs ITO (ITAT Hyderabad)
Hyderabad ITAT Deletes ₹24.96 Lakh Section 69A Addition: Cash Handled by SBI Business Correspondent Belongs to Bank Customers, Not the Agent
The Income Tax Appellate Tribunal, Hyderabad Bench, allowed the appeal filed by Ramesh Kandakatla for Assessment Year 2017-18 and directed the Assessing Officer (AO) to vacate the addition of Rs. 24,96,000 made under Section 69A of the Income-tax Act, 1961, holding that the cash deposits represented transactions undertaken by the assessee in his capacity as a Business Correspondent (BC)/Customer Service Point (CSP) of State Bank of India rather than his own unexplained money. The order was pronounced on 07 August 2026, following conclusion of hearing on 15 June 2026.
The assessee had filed his return of income for AY 2017-18 on 31 March 2018, declaring income of Rs. 1,10,090. The AO subsequently received information regarding substantial financial transactions in the assessee’s bank account, including cash deposits of Rs. 13,96,000 during the demonetisation period from 09.11.2016 to 30.12.2016, and total cash deposits of Rs. 24,96,000 during the relevant year in Current Account No. 31593392331 maintained with State Bank of India, Narsampet Branch. The AO issued notice under Section 143(2) dated 26.09.2018 and subsequently issued notices under Section 142(1) dated 28.01.2019, 24.05.2019 and 29.10.2019, requiring the assessee to explain the bank-account entries.
