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IN THE INCOME TAX APPELLATE TRIBUNAL ‘SMC’ BENCH, BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No. 2384/Bang/2025 Assessment Year: 2017-18 Pramod Basavaraj, Vs. The Income Tax Officer, 15, 6^th Main, 7^th Cross, Ward – 1(4), Saraswathipuram, Mysuru.

Mysuru – 570 009.

PAN – AMNPP 1766 H APPELLANT RESPONDENT Assessee by : Shri Vageesh Hegde, CA Revenue by : Shri Ganesh R Ghale, Advocate – Standing Counsel for Revenue Date of hearing : 23.02.2026 Date of Pronouncement : 06.03.2026

O R D E R

PER WASEEM AHMED, ACCOUNTANT MEMBER:

The present appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals) under section 250 of the Income-tax Act, 1961 dated 26.08.2025.

2. The assessee in the grounds of appeal has raised as many as five grounds. However, for the sake of brevity and convenience, we are not inclined to reproduce the same here.

3. The grounds raised by the assessee are interconnected and pertain to the addition made by the AO under section 69A of the Act.

4. The relevant facts of the case are that the assessee is an individual deriving income from house property in the form of rental income and from business by conducting English speaking classes. The assessee filed the return of income for the captioned assessment year declaring total income of Rs. 6,33,250.00 only. The case of the assessee was selected for scrutiny on account of cash deposits made during the demonetization period to the tune of Rs. 28 Lakhs.

5. In response to the notice issued by the AO for verification of the cash deposits, the assessee submitted that he had earlier given advance to various parties for the purpose of purchasing a site and constructing a house. It was submitted that such advance was duly reflected in the balance sheet filed along with the return of income for the captioned assessment year. The assessee further explained that due to the ill health of his father, he decided to stay with him and therefore did not proceed with the proposed purchase and construction of the house. Consequently, the advance given to mother was returned to him. The assessee submitted that the said amounts were deposited in his account with Punjab National Bank during the demonetization period and therefore the impugned cash deposits were out of explained sources. In support of the claim, the assessee also furnished a confirmation letter from his mother regarding receipt of the advance and repayment of the same to the assessee, along with a copy of the agreement entered with her for the purchase of the site.

5.1 However, the AO observed that no such confirmation letter, as claimed by the assessee, was found attached in the assessee’s e-filing account. After verification of the details furnished by the assessee, the AO held that the assessee had failed to discharge the burden of proving the genuineness of his claim regarding the source of the cash deposits. The AO further noted that considering the income declared by the assessee in earlier years and the possible savings accumulated, only a reasonable sum of Rs. 7 Lakhs could be accepted as explained. Accordingly, the balance cash deposit of Rs. 21 Lakhs was treated as unexplained money under section 69A of the Act and was brought to tax at the rate prescribed under section 115BBE of the Act.

6. Aggrieved, assessee filed an appeal before Ld. CIT(A).

7. Before the Ld. CIT(A), the assessee filed the statement of assets and liabilities as on 31.03.2016 wherein under the head current assets and amount under the nomenclature of Rs. 25,50,000 was appearing, copy of the cash book and copy of the property documents in support of his claim. It was further submitted that the property proposed to be sold by his mother could not ultimately be transferred due to differences of opinion with the concerned housing society. The assessee therefore submitted that the advance earlier given to his mother was returned