Once the source of cash is accepted and taxed under Section 269SS, second addition under Section 69A on the same amount is impermissible and amounted to double taxation.
In the case of Sowjanya Basi Reddy (ITA No. 7/Hyd/2025) for AY 2017–18, the Income Tax Appellate Tribunal (ITAT), Hyderabad, set aside an addition of ₹18.2 lakhs made under Section 69A of the Income-tax Act. The assessee had explained that the cash deposits made during the demonetisation period were proceeds from the sale of agricultural land received in cash in March 2016. The Assessing Officer initially accepted the explanation but made an addition under Section 269SS for accepting cash.
The assessee had already settled the 269SS addition under the Vivad Se Vishwas Scheme by paying applicable taxes. However, the case was later reopened under Section 263, and the AO once again made an addition-this time under Section 69A-treating the same cash as unexplained.
The Tribunal held that once the source of cash was accepted and taxed under Section 269SS, second addition under Section 69A on the same amount was impermissible and amounted to double taxation. It emphasized that the time gap between receipt and deposit of cash did not invalidate the source when the explanation was otherwise credible and consistent.
Accordingly, the ITAT allowed the appeal and deleted the Section 69A addition, upholding the principle that the same income cannot be taxed twice.
The copy of the order is as under:
