The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has overturned an assessment made by the Assessing Officer (AO), which had classified a cash deposit of Rs. 8,00,000 as ‘income from other sources.’ The Tribunal determined that this amount was actually derived from the sale of casuarina trees, leading to the deletion of the addition.
T. Radhakrishnan, the appellant-assessee, submitted his income tax return for the assessment year 2016-17 on July 8, 2016, reporting a total income of Rs. 3,23,119 and agricultural income of Rs. 8,00,000 derived from the sale of casuarina trees.
Subsequently, the case was selected for scrutiny, resulting in a notice issued on August 2, 2017. The purpose of this notice was to verify the cash deposits and ensure that the income and investments related to properties had been accurately disclosed.
During the assessment proceedings, the AO noticed a cash deposit of Rs. 8,00,000/- in the appellant’s bank account on 03.07.2014 and asked him to explain the source of this deposit.
The appellant stated that the amount arose from the sale of casuarina trees, which were already disclosed as agricultural income in the return. He submitted confirmation letters from Shri Selvaraj and Shri Umapathy, who acted as agents in the sale transaction, in support of his claim.
Under section 131 of the Act, a summons has been issued by the AO to Shri Selvaraj and Shri Umapathy. As per them, they had not filed any cash before the appellant. Putting reliance on their statements, the AO does not believe the explanation of the taxpayer, and as the income from other sources, it added Rs 8,00,000 to his total income.
The same addition was made by the taxpayer before the First Appellate Authority (FAA), which dismissed his appeal. The taxpayer is dissatisfied with the same and has approached the tribunal asking for relief.
The case has been reviewed by the single-member bench of George George K( Vice President) and the material on record. The taxpayer owned 23 acres of agricultural land in Tamil Nadu and had revealed Rs. 8,00,000 as agricultural income from the sale of casuarina trees for the AY 2015-16.
A cash deposit of Rs. 8,00,000 on 03.07.2014, was made in his bank account, which the AO disbelieved and added to income as ‘income from other sources’.
Confirmation letters from Shri Selvaraj and Shri Umapathy have been submitted. As per their statements, the purchaser in Mumbai had paid the amount, which was shown in the bank statement of the taxpayer.
It was discovered by the appellate tribunal that the cash deposit matched the sale proceeds of the casuarina trees, and no reason has been given for the AO to make the addition. Rs 8,00,000 addition has been removed by the tribunal.
As per that, the appeal was permitted.
| Case Title | Shri T. Radhakrishnan vs. The Income Tax Officer |
| Case No. | ITA No.: 1773/CHNY/2025 |
| Appellant by | Shri M. Karunakaran, Advocate |
| Respondent by | Shri Y. Sudarshan |
| Chennai ITAT | Read Order |
