Case Law Details
Krishna Murthy Vuppala Vs ITO (ITAT Hyderabad)
In the case of Krishna Murthy Vuppala vs. ITO, the Hyderabad ITAT has rendered a significant decision regarding cash deposits during the demonetization period. The appellant, a proprietor of M/s. Krishna Provision Store, contested the addition of Rs.9,79,000/- under section 69A of the Income Tax Act. Despite challenges, the appellant sought an opportunity to substantiate the nature and source of the cash deposits, leading to a pivotal ruling.
The appeal stemmed from the assessment year 2017-18, where the appellant’s return of income was scrutinized under CASS. Despite statutory notices and requests for information, the appellant’s response was lacking. Consequently, the Assessing Officer proceeded to complete the assessment under section 144 of the IT Act. The crux of the dispute lay in the cash deposits made during the demonetization period, totaling Rs.34,27,250/-. The appellant failed to provide adequate documentation explaining these deposits, resulting in an addition of Rs.9,79,000/- under section 69A r.w.s. 115BBE.
The appellant contested this decision, citing engagement in business under section 44AD of the IT Act. Despite maintaining no books of account, the appellant claimed the cash deposits stemmed from available funds in old currency during the demonetization phase. The appellate authority, however, upheld the addition, emphasizing the appellant’s failure to substantiate the source of deposits.
In the subsequent appeal before the Tribunal, the appellant reiterated the business nature of the cash deposits and sought a final opportunity to provide evidence. After considering arguments from both sides and pertinent legal precedents, the Tribunal decided to grant the appellant one final chance to demonstrate the legitimacy of the cash deposits. This decision was grounded in the principles of justice and the need for a fair hearing.
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