Venugopal Rao Vs ITO (ITAT Hyderabad)
The case of Venugopal Rao versus Income Tax Officer (ITO) before the Income Tax Appellate Tribunal (ITAT) in Hyderabad concerns the addition for cash deposits made during the demonetization period by an agriculturist, Venugopal Rao. The ITAT granted partial relief to the assessee.
Background: The Commissioner of Income Tax (Appeals) invoked proceedings under section 144 of the Income Tax Act, 1961, against Venugopal Rao for the assessment year 2017-18 due to cash deposits totaling Rs. 11,08,310 made during the demonetization period. Despite notices issued, Venugopal Rao failed to file the return of income, leading to scrutiny proceedings under section 144 of the IT Act.
Assessment and Appeals: During the assessment, Venugopal Rao explained that the cash deposits were proceeds from agricultural income and provided documents such as patta pass books and sale bills of paddy to support his claim. However, the Assessing Officer treated all cash deposits as unexplained money under section 69A of the IT Act, leading to the taxation of such amounts under section 115BBE. The Commissioner of Income Tax (Appeals) upheld the Assessing Officer’s decision, prompting Venugopal Rao to appeal before the ITAT.
Arguments: Venugopal Rao’s representative argued that the cash deposits were from the sale proceeds of agricultural land owned by him and his family. He provided documentary evidence of the agricultural holdings and asserted that the source of the deposits was well-documented and readily available. The representative contended that the addition of unexplained income was unwarranted and should be deleted.
