Sangeeta Sunil Jolapure Vs ITO (ITAT Panaji)
₹7 Lakh Recurring Deposit Explained from Disclosed Presumptive Business Receipts; Panaji ITAT Deletes Section 69 Addition
The assessee declared business income under section 44AD, disclosing gross receipts of ₹18,37,200 for AY 2016-17. In reassessment, the AO determined total income at ₹21.55 lakh after adding:
- ₹7 lakh invested in a recurring deposit as unexplained investment under section 69; and
- ₹10,39,735 received from VKP Urban Cooperative Society as income from other sources.
The ITAT observed that the availability of gross business receipts of ₹18.37 lakh had not been disputed by the AO. Therefore, the assessee’s explanation that the ₹7 lakh recurring deposit was funded from those disclosed receipts was accepted, and the addition under section 69 was directed to be deleted.
Regarding ₹10.40 lakh allegedly received as interest from the cooperative society, the Tribunal upheld the remand but restricted the fresh proceedings to this issue alone. The AO was directed to decide it after granting a reasonable opportunity of hearing.
For AY 2018-19, the dispute related to:
- ₹25,31,000 credited in the assessee’s bank account and added under section 69A; and
- ₹10,26,775 treated as interest income.
The assessee contended that the bank credits represented amounts received from family members and produced supporting documents. Since these documents required verification, the ITAT restored both additions to the AO for fresh adjudication limited to these two issues.
The assessee was directed to cooperate and furnish all relevant evidence, failing which the AO would be free to decide the matter based on the available record.
FULL TEXT OF THE ORDER OF ITAT PANAJI
These appeals filed by the assessee are directed against the separate orders dated 27.03.2025 and 14.07.2025 passed by Ld. CIT(A)/NFAC for the assessment years 2016-17 and 2018-19 respectively.
2. Since identical facts and common issues are involved in both the above captioned appeals of the assessee, therefore, we proceed to dispose of the same by this common order.
3. First, we shall take up the appeal of the assessee in ITA No.322/PAN/2025 for A.Y. 2016-17 for adjudication as the lead case.
ITA No.322/PAN/2025, A.Y. 2016-17 :
4. The appellant has raised the following grounds of appeal :-
“1) The order of the CIT(A) is bad in law and is void-ab-initio.
2) The Assessment Order passed by the ld AO u/s 147 r.w.s 144 r.w.s 144B of the Income Tax Act, 1961, and set-aside by the CIT(A) is without jurisdiction, misconceived and without following the principles of natural justice.
3) The order passed by the ld AO is without jurisdiction as the notice issued u/s 148 of the Income Tax Act, was issued by the jurisdictional assessing officer (J40) and not by the faceless assessing officer (FAO) who has passed the order.
4) The re-opening of the assessment u/s 147 of the IT Act, is bad in law, as the AO has not considered section 139 return filed by the appellant while deciding on the re-opening of the case.
5) The ld AO has erred in making addition u/s 69 of Rs.7,00,000/-, inspite of the fact that provision of section 69 is not applicable to the case.
6) The ld AO has erred in considering Rs.10,39, 735/- as income from other sources without looking into the facts of the case.
6) With these and such other grounds that may be urged at the time of hearing the appellant prays for relief sought for.”
5. The appellant has also raised the following additional ground of appeal :-
“That the Order of Assessment passed u/s 147 r.w.s. 144 r.w.s. 144B of the Income-tax Act, 1961 by the ld. Assessing Officer is invalid, Void-ab-initio as the Approval granted u/s 151(2) of the Act has not been granted in accordance with the Provisions of Section 151 of the Act.
6. Facts of the case, in brief, are that the assessee is an individual and has furnished her return of income by declaring income of Rs.4,15,250/- consisting of business income of Rs.3,89,250/- and house property income of Rs.1,26,000/- after claiming Chapter VI-A deduction of Rs.1,00,000/-. The return was processed u/s 143(1) of the IT Act. Subsequently, the case was reopened u/s 147 and notice u/s 148 of the IT Act was issued to the assessee on 14.06.2019. The assessee did not furnish return in response to above notice, therefore, notice u/s 142(1) and notice u/s 144 of the IT Act respectively were issued to the assessee. However, the assessee did not furnish any reply in response to above notices, therefore, the Assessing Officer vide order dated 13.09.2021 completed the assessment proceedings u/s 147 r.w.s. 144 r.w.s. 144B of the IT Act by determining the income of the assessee at Rs.21,54,985/- as against the income of Rs.4,15,260/- returned by the assessee. The above assessed income includes addition of Rs.7,00,000/- being unexplained investment u/s 69 of the IT Act and addition of Rs.10,39,735/-being income from other sources.
7. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. After considering the reply and submissions of the assessee, Ld. CIT(A)/NFAC set-aside the impugned order passed by the Assessing Officer for de novo
8. It is the above order against which the assessee is in appeal before this Tribunal.
9. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. In this regard, we find that the counsel of the assessee has not pressed the legal grounds raised before this Tribunal and argued only on the grounds related to merits of the case. In this regard, we find that the assessee has challenged the addition of Rs.7,00,000/- made u/s 69 of the IT Act regarding investment in recurring deposit and the addition of Rs.10,39,735/-being interest income received from VKP Urban Cooperative Society under the head Income from other sources. In this regard, it is the claim of the counsel of the assessee that the assessee is doing business and declaring income u/s 44AD of the IT Act wherein gross receipt/ turnover of Rs.18,37,200/- has been disclosed which was used for investment in recurring deposit of Rs.7,00,000/-. We find some force in the arguments of the counsel of the assessee since the availability of funds to the extent of Rs.18,37,200/- is not disputed by the Assessing Officer and therefore, the claim of the assessee appears to be genuine that the recurring deposit was maintained out of the above gross receipt, accordingly, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC in this regard and direct the Assessing Officer to delete the addition of Rs.7,00,000/- made u/s 69 of the IT Act.
10. With regard to challenge to the addition of Rs.10,39,735/-, we find that Ld. CIT(A)/NFAC has already set-aside this addition and restored the matter back to the file of the Assessing Officer for de novo assessment after providing reasonable opportunity of hearing to the assessee, we do not find any infirmity in the above finding of Ld. CIT(A)/NFAC, however, we deem it appropriate to direct the Assessing Officer to decide this limited issue of addition of Rs.10,39,735/- only after providing reasonable opportunity of hearing to the assessee. Accordingly, the above ground is allowed for statistical purposes.
11. In the result, the appeal filed by the assessee in ITA No.322/PAN/2025 for A.Y. 2016-17 is partly allowed for statistical purposes.
ITA No.323/PAN/2025, A.Y. 2018-19 :
12. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. In this regard, we find that the counsel of the assessee has not pressed the legal grounds raised before this Tribunal and argued only on the grounds related to merits of the case. In this regard, we find that the assessee has challenged the addition of Rs.25,31,000/- regarding unexplained credit u/s 69A of the IT Act in her bank account and the addition of Rs.10,26,775/- being interest income received from VKP Urban Cooperative Society and other bank interest under the head Income from other sources. In this regard, it is the claim of the counsel of the assessee that the assessee is in receipt of credits from their family members which does not form part of business income, the details of related credit entries were furnished before Ld. CIT(A)/NFAC, however, Ld. CIT(A)/NFAC restored the matter back to the Assessing Officer for de novo assessment. We find some force in the arguments of the counsel of the assessee since various documents in support of her contentions were furnished before us in the paper book and therefore, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC wherein he restored the matter for de novo assessment and instead we restore the matter back to the file of the Assessing Officer with a direction to decide these two limited issues only i.e. addition of Rs.25,31,000/- and addition of Rs.10,26,775/-afresh and as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by the Assessing Officer and to produce relevant documents, submissions and evidences, if any, in support of her contentions without taking any adjournment under any pretext, otherwise the Assessing Officer shall be at liberty to pass appropriate orders as per law. Thus, the grounds of appeal raised by the assessee are allowed for statistical purposes.
13. In the result, the appeal filed by the assessee in ITA No.323/PAN/2025 for A.Y. 2018-19 is allowed for statistical purposes.
14. To sum up, the appeal in ITA No.322/PAN/2025 is partly allowed for statistical purposes and the appeal in ITA No.323/PAN/2025 is allowed for statistical purposes, as indicated above.
Order pronounced on this 18th day of August, 2026.
