T. Radhakrishnan Vs ITO (ITAT Chennai)
Income Tax Appellate Tribunal (ITAT), Chennai, has ruled in favor of an individual taxpayer, T. Radhakrishnan, by deleting an addition of ₹8,00,000 made to his income by the Assessing Officer (AO). The case, T. Radhakrishnan Vs ITO, pertained to the assessment year 2015-16 and centered on a cash deposit the assessee had made into his bank account.
The assessee, an individual, had disclosed an income of ₹8,00,000 in his tax return as agricultural income from the sale of casuarina trees from his 23 acres of land in Tamil Nadu. A subsequent scrutiny by the AO revealed a cash deposit of the exact same amount—₹8,00,000—in his bank account on July 3, 2014. The AO, questioning the source of this cash deposit, asked the assessee for an explanation. In his defense, the assessee maintained that the deposit was indeed the proceeds from the sale of the trees. He provided confirmation letters from two intermediaries, Shri Selvaraj and Shri Umapathy, to support his claim.
During the assessment proceedings, the AO issued summons under Section 131 of the Income Tax Act to the two intermediaries. In their initial sworn statements, both individuals appeared to deny having personally paid the cash to the assessee. Interpreting these statements as a lack of corroboration, the AO disbelieved the assessee’s explanation. The AO subsequently treated the entire ₹8,00,000 as an unexplained cash credit under Section 68 and added it to the assessee’s total income as ‘income from other sources.’ The First Appellate Authority (FAA) concurred with the AO’s findings and upheld the addition, which prompted the assessee to appeal to the ITAT.
