The Income Tax Appellate Tribunal (ITAT), Hyderabad Bench while upholding the addition of Rs.1.81 Crores observed that the assessee failed to discharge onus of proving the genuineness of income from undisclosed sources.
The assessee, Chinta Reddy Venugopal Reddy submitted that the sources for cash deposits and time deposits are out of advances received for sale of agricultural land and out of own funds. The assessee submitted that he had entered into agreement for sale of agricultural lands and received advances during the FY 2013-14. The Assessing Officer asked the assessee to submit the details of sale of agricultural land along with copies of agreement of sale/Registered deed etc. The assessee has submitted copies of agreements of sale entered on plain paper showing that the purchasers who are agricultural farmers from the native village of the assessee i.e. Eturu Village, Thirumalgiri Mandal Nalgonda District, given advance for purchase of agricultural land from the assessee during the Financial Year 2013-14.
The Assessing Officer treated the alleged cash deposit in assessee’s savings account maintained with M/s. Vijaya Bank and State Bank of Hyderabad to the tune of Rs.97,70,700 and Rs.93,86,720; totaling respectively to Rs.1,91,57,420 as unexplained. However, the CIT(Appeals) lower appellate order has deleted the impugned addition.
The revenue contended that the assessee had claimed the source of the cash and time deposits out of advances received for sale of the agricultural lands in the relevant previous year. He has produced the so-called agreement(s) of sale on a plain paper involving 6 farmers or vendors from Eeeturu village, Thirumalagiri Mandal, Nalgonda District.
The revenue further said that as per the assessment order itself two farmers that Sri Moola Prasad and Chillara Chandramouli only got recorded their statements and thereafter, the assessee also submitted affidavit(s) with aadhar card(s) and confirmations. The Assessing Officer observed in the light of each and every party, agricultural land holding, annual income and amount of advance claimed that the same lacked genuineness / credit worthiness and therefore he proceeded to make 68 additions which stands deleted in the CIT(Appeals) order.
The coram of A.Mohan Alankamony and S.S.Godara said that ong back that any explanation under the provisions of the Act has to be appreciated in light of human probability after removing all blinkers.
The Tribunal ruled that it is very much apparent that even a single penny has not come via banking channel followed by the grossly disproportionate source(s) of the so called vendees who have not even bothered to get six corresponding sale deeds registered even after a time period of almost a decade.
Therefore, the ITAT while restoring the matter opined that the CIT(Appeals) had erred in law & on facts in deleting the impugned addition of Rs.1,81,57,440 income from undisclosed sources.
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