ITAT Chennai Deletes ₹11.55 Lakh Addition Under Section 69A: Proof of Creditworthiness and Genuineness of Bank Transfers Upheld

Case Overview

Case Name: Smt. Ravikumar Jeeva Kalaivani Vs ITO (ITAT Chennai)
Assessment Year: 2019–20
Provision in Dispute: Section 69A of the Income Tax Act, 1961
Outcome: Appeal allowed in favour of the assessee; addition of ₹11,55,000 directed to be deleted

Background and Context

This case before the Income Tax Appellate Tribunal (ITAT), Chennai, arose from an assessment reopened by the Assessing Officer (AO) on the basis of information pertaining to time deposits and interest income credited in the bank account of a housewife assessee. The assessee, a resident individual with no business income, primarily earned interest from fixed deposits and had not originally filed her Return of Income (RoI) for Assessment Year 2019–20.

The AO initiated reassessment proceedings after receiving information pointing to:

• Time deposits aggregating to ₹1,59,40,000 made by the assessee
• Interest income of ₹8,09,179 received from Axis Bank

In response to the notice issued under Section 148 of the Income Tax Act, 1961, the assessee filed her RoI declaring interest income of ₹9,04,280 from bank deposits.

What the Assessing Officer Found

Upon examination of the materials and explanations submitted by the assessee, the AO accepted the time deposits of ₹1,59,40,000 as satisfactorily explained. However, certain credits appearing in the assessee's Axis Bank account — amounting to ₹18,99,904 — were not treated as interest or maturity proceeds of time deposits. The assessee claimed these amounts were received from four separate individuals.

Finding the assessee's explanations inadequate in respect of these credits, the AO invoked Section 69A of the Income Tax Act, 1961 and treated the entire sum of ₹18,99,904 as unexplained money.

Proceedings Before the Commissioner of Income Tax (Appeals)

The assessee challenged the AO's action before the Commissioner of Income Tax (Appeals) / NFAC, Delhi. The CIT(A), vide order dated 14.08.2025, granted partial relief, deleting additions relating to two parties as tabulated below:

However, the CIT(A) sustained an addition of ₹11,55,000 pertaining to two other individuals, as follows: