Patnala Srinivas Vs ITO (Telangana High Court)
In the case of Patnala Srinivas vs. ITO, the Telangana High Court dismissed the assessee’s appeal concerning the addition of ₹2,25,000 as unexplained income under Section 69A of the Income Tax Act, 1961. The assessee, engaged in the supply of building materials, had declared this amount as agricultural income in his tax return for AY 2000-01. However, the Assessing Officer, based on an inspection report, found that the land was plotted for development and not under cultivation. The Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal (ITAT) upheld this finding, referencing revenue department reports confirming that no agricultural activity had taken place on the land. The assessee’s failure to provide any supporting evidence further weakened his claim.
The High Court ruled that Section 69A may not directly apply but agreed with the tax authorities that the income could not be classified as agricultural. It noted that factual findings based on site inspections and official records confirmed the land’s non-agricultural use. Since no substantial question of law was involved, the court declined to interfere, affirming the lower authorities’ decision. Consequently, the appeal was dismissed, rejecting the exemption claim for agricultural income.
