RAVIPATI GANDHI GOPALAKRISHNA,KURRELAGUDEM vs. ITO WARD 2, KKS TOWERS

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ITA 549/VIZ/2025Status: DisposedITAT Visakhapatnam10 July 2026AY 2017-1811 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that while the assessee had agricultural lands and conducted some operations, the link between agricultural income and the cash deposits made during the demonetization period was not proven. The Tahsildar's certificate was deemed insufficient and not for the relevant period.

What were the facts?

The Assessing Officer made an addition of Rs. 13,40,250/- under Section 69A for unexplained cash deposits in bank accounts, as the assessee failed to provide proper explanation. The assessee claimed the deposits were from agricultural income, supported by a Tahsildar's certificate and land holdings.

What were the issues?

Whether cash deposits made during the demonetization period can be treated as unexplained income when claimed to be from agricultural sales, and the validity of a Tahsildar's certificate for proving agricultural income.

Which sections of the Income-tax Act were involved?

Section 69A,Section 139(1),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

Before: SHRI UDAYAN DAS GUPTA, HON’BLE & SHRI OMKARESHW AR CHIDARA, HON’BLE

For Respondent: Dr. Aparna Villuri, Sr AR

PER OMKARESHW AR CHIDARA, ACCOUNTANT MEMBER: In the above cited appeal, the Ld. Assessing Officer [hereinafter in short “Ld.AO”] made an addition of Rs.13,40,250/- under section 69A of Income Tax Act, 1961 [hereinafter in short “the Act”], as the assessee failed to give proper explanation to the cash deposits made into his bank accounts.

2.

Brief facts are that, the assessee is not filing the return of income under section 139(1) of the Act and the Ld.AO issued a notice and a questionnaire to the assessee asking him to furnish the details of bank accounts, profit and loss account, Balance Sheet, statement of movable and immovable properties and prove of agricultural income, if any, as source of cash deposits made during the year into his bank accounts. During the course of assessment proceedings, the Ld.AO has obtained copies of bank statements from the bank accounts by issuing the letter under section 133(6) of the Act from the respective banks where the assessee is having Savings Bank accounts. Ld.AO has verified the information relating to the assessee under Insight Portal and 360-degree portal of the Income Tax Department where it was noticed that the assessee made a total cash deposits of Rs.9.44 lakhs during the impugned year. Hence the show-cause notice was issued to the assessee and requested him to file sources of cash deposits made into his bank accounts. In response, to this notice, the assessee has filed a letter dated 05.11.2019 and the gist of the letter is reproduced below: -

“the assessee is having agricultural land of 14Acres 85Cents in amberpeta village as stated in the pass book of agricultural land holdings bearing No. 0501200040049 there in different crops are raised such as paddy, palm oil etc., and further his spouse is also having agricultural land of 2Acres 50Cents in amberpeta village as stated in the pass book of agricultural land holdings bearing No. 0501200040253 there in different crops are raised such as paddy, palm oil etc., The Assessee derives agriculture income of Rs. 5,77,000/- from the said lands of 14Acres 85 Cents as certitied by tahsildar and spouse also derives agriculture income of above Rs.80,000/- from the said lands of 2Acres 50Cents. The assessee also derives agriculture income of above Rs.1,60,000/-from the agricultural land of 3Acres 95Cents bequeathed from the ancestors. "

3.

After getting the information from the appellant, the Ld.AO has sent another letter dated 06.11.2019 and required the assessee to furnish the information relating to nature of crops grown, yield, sale proceeds received, mode of receipt, to whom the agriculture products was sold along with name, address, PAN etc. The Ld.AO noticed that an amount of Rs.8.79 lakhs was deposited in S.B Account of assessee during the demonetization period and the same was treated as unexplained money under section 69A of the Act as there was no proper explanation along with evidences. Apart from this, some more cash deposits were also made and the total cash deposits made during the impugned year amounts to Rs.9.44 lakhs. Apart from these cash deposits, some credit entries are appearing in bank accounts to the tune of Rs.3,96,250/- remained as unexplained deposits during the A.Y. 2015-16. Thus, finally, the Ld.AO made an addition of Rs.13,40,250/- as unexplained money for the year under consideration while concluding the assessment.

4.

Aggrieved by the addition made by the Ld.AO, the appellant filed an appeal before the Ld. CIT(A). During the appellate proceedings, notice under section 250 of the Act was issued to the appellant on various dates and the appellant was asked to file written submissions on e- filing portal. In response, to this e-mail, the appellant has stated that almost the entire amount deposited into his bank account was only out of sale of agricultural produce and since the agricultural income is not taxable under the Income Tax Act, 1961, there is no scope for making an addition. The appellant has also submitted that they are having 14.75 Acres of land in his name and 2.5 Acres in the name of his wife R.S.Laxmi Prasanna and apart from this land, the appellant claims to have inherited land of 3.95 Acres. Thus, the family has got approximately 26 acres of agricultural land from this agricultural land, the appellant claims to have grown various agricultural crops and the same was sold to several persons and the cash received by selling the agricultural produce was deposited into his bank account.

5.

The appellant has also claimed that an amount of Rs.2,26,500/- was received from A.P. State Civil Supplies Corporation towards supply of agricultural produce during the current year. Moreover, the appellant claims that he has taken agriculture loan of Rs.3,00,000/- from Andhra bank. The Area Tahsildar gave an “Agricultural Income Certificate” stating that the assessee is carrying on the agricultural activities in the lands of himself and his family members and this certificate is dated 30.04.2019, where the Tahsildar has given a certificate that after due enquiry the annual income derived from the agricultural land is Rs.5,77,100/-. This certificate is valid only for obtaining the bank loan and not valid for any other purposes. The appellant has filled a copy of pattadar passbook to demonstrate that the assessee himself and his wife possess agricultural land of more than 26 acres. In view of all these circumstantial evidences, the assessee requested the Ld. CIT(A) to delete the addition made under section 69A of the Act.

6.

a) After considering the submissions of the assessee, Ld. CIT(A) held that he is in agreement with the Ld.AO as the appellant has failed to prove that the cash deposits are earned out of the agricultural income because no invoices of sale of agricultural products nor purchase of fertilizers / pesticides were filed before Ld.AO or before the First Appellate Authority. As far as the certificate issued by Tahsildar is concerned, it was held that he is not the right authority certify the income of the appellant from agriculture. Instead, he can only tell the average yield of land present in the village and hence the certificate issued by Tahsildar does not have any validity for Income tax purposes. As the assessee has not provided the evidences relating to purchase of fertilizers / pesticides and sale of agricultural produce etc., the Ld.CIT(A) confirmed the addition made by Ld.AO and dismissed the appeal of the assessee.

b) Ld. CIT(A) has held that the assessee made cash deposits during the period of 14 days only which falls within the demonetization period from 10.11.2016 to 24.11.2016. Ld.CIT(A) further held that the cash deposits of Rs.8.79 lakhs was deposited within the span of 14 days which falls within the demonetization period and it is not possible to earn such huge agricultural income in a short span. Ld. CIT(A) also held that during the earlier years, there are no such huge cash deposits, hence the Ld. CIT(A) held that the cash deposits are made out of unexplained money and not from the sale of agricultural produce as claimed by the assessee and finally confirmed the addition made by the Ld.AO.

7.

As the assessee did not get the relief from the orders of Ld.AO and Ld. CIT(A), assessee preferred an appeal before the ITAT with the following grounds of appeal: -

1) The order under Sec 250 Dt., 21.07.2025 passed by the CIT(A), NFAC, Delhi for the A.Y 2017-18 confirming the addition of Rs. 13,40,250/- made by the A.O ward-2 Eluru may be erroneous both in law and also on facts of the case 2) In the facts and circumstances of the case recorded in the annexed Statement of Facts, it is requested that the documents already filed with the authorities below and the additional documents which may be submitted during the course of hearing of the appeal, may be admitted as provided by the Rules 29 of ITAT rules and adjudication made in conformity with law 3) Taking note of the concept of law that books of accounts are required to be maintained only in the circumstances stipulated by Sec 44AA of the Act and on account of non application of those requirements to the instant case the assessee’s exclusive source of Income being only agriculture the authorities below ought not have brushed aside the holding of agricultural income on the technical grounds that the assesseee failed to produce bills/invoices/confirmations from traders and thereby the impugned addition of Rs. 13,40,250/- resorted to under Sec 69A may be void in law 4) In the context of holding extensive agricultural lands of the total extent of about 20.00 acres (roundly) by the assessee and his spouse as per the details recorded in the annexed statement of facts and in the context of establishing receipt of agricultural income by production of documentary evidence in the form of CERTIFICATE OF REVENUE AUTHORITIES viz Taluk Magistrate, viz Tahsildar supply of paddy to Government agency and other associate documents it may not appear to be justifiable to treat the cash deposits made form out of agricultural income of the current year and that of the accumulated agricultural income as unexplained money within the meaning of Sec 69A and hence the impugned addition of Rs. 13,40,250/- may be UNSUSTAINABLE in the eyes of law 5) In the context of non filing of ROI under Sec 139(1) due to non availability of taxable income, the authorities ought not have drawn adverse inferences for such non filing the ROI and also considering the fact that the cash despots were made during the period of demonetization as per the guidelines given by the GOI/RBI, the Authorities ought not have drawn adverse inferences leading to formulation of addition under Sec 69A to the aforesaid extent and thereby the impugned addition may be void in Law 6) In the facts and circumstances recorded in the annexed statement of facts it is requested that the impugned addition of Rs. 13,40,250/- may be ordered to be deleted in accordance with law 7) For these reasons and other reasons which may be advanced during the course of hearing of appeal it is requested that the RELIEFS sought for may be allowed in accordance with law

8.

From these grounds of appeal, it is observed that the assessee made the cash deposits in Andhra bank to the extant of Rs.3,00,000/- and in SBI to the extent of Rs.6.44 lakhs and there are other credit entries in SBI to the extent of Rs.3,96,251/-. Thus, the total credits during the year under consideration came to Rs.13,40,250/- and all these deposits are sourced from the agricultural income only. The same evidences which were filed before the Ld. CIT(A) like copy of pattadar passbook, certificate issued by the Tahsildar to show that the assessee derived agricultural income of Rs.5.77 lakhs from the said lands of assessee and Rs.80,000/- from the agricultural land of spouse and Rs.1,66,000/- from the agricultural land which was bequeathed to whim from his ancestors, thus the total amount of Rs.8,23,000/- was received by the assessee during the impugned assessment year as agricultural income. The assessee claimed that this amount was deposited into his bank account during the demonetization period. Before the ITAT also the Ld.AR of the appellant has argued on similar lines. The appellant relied on the Agricultural Income Certificate issued by the Tahsildar, an amount of Rs.2,26,500/- received from A.P. State Civil Supplies Corporation for selling his paddy and getting the agricultural loan of Rs.3,00,000/- prove that he is doing agricultural activities extensively and the entire cash deposits only are from selling the agricultural produce as the assessee does not have any other source of income, the presumption is that the cash deposits are only out of the agricultural income earned by the appellant, argued by the Ld.AR during the appellate proceedings before ITAT.

9.

Ld. Departmental Representative (hereinafter in short “Ld. DR”) heavily relied on the orders of Ld. CIT(A) and the assessment order. Ld. DR arguments are summarized as follows:

a. The assessee has not filed any documentary evidences to show that agricultural activities are conducted extensively. No purchase bills of fertilizers / pesticides or sale invoices of agricultural produce were produced before Ld.AO or Ld.CIT(A) or even before the Bench.

b. Huge cash deposits were made only during this demonetization time of 14 days and no one can earn such huge agricultural income within a short span of 14 days.

c. In the entire year, prior to demonetization period and in earlier year also there are no such huge cash deposits and hence the argument of agricultural income is devoid of merits.

d. There is no validity for the agricultural income certificate issued by the Tahsildar because there is no basis for issuance of such certificate and moreover the certificate issued by the Tahsildar is in the year 2019 and in this certificate nowhere it was mentioned that the assessee was earning the huge agricultural income like this during the A.Y. 2017-18 period. The Agricultural Income Certificate issued clearly shows that the same cannot be utilized for any other purposes except for getting the agricultural loan from the bank. Hence the certificate issued by Tahsildar does not have any evidentiary value with respect to the income tax proceedings.

e. The assessee was requested consistently by the Ld.AO / Ld. CIT(A) to produce the details of purchase invoice of fertilizers / pesticides and also name, address of the persons to whom the agricultural produce was sold. The assessee has totally failed in submitting all the above details and hence it was submitted that the assessee has not proved the sources of cash deposits out of agricultural income.

f. In the absence of any documentary corroborating evidences, Ld. DR has submitted that the order of the Learned Commissioner of Income Tax (Appeals), is legally correct and valid and hence the additions made by the Ld.AO should be upheld.

10.

After hearing both the sides and perusing the documents filed by the Ld.AR of the appellant, the Bench decides to confirm the addition made by the Ld.AO to the extent mentioned below: -

a. Ld.AR of the appellant has demonstrated that a cheque was received for an amount of Rs.2,26,500/- which was received from A.P. State Civil Supplies Corporation towards sale of paddy etc., and hence the same is to be treated as conclusive evidence with respect to the agricultural income. Hence the addition to this extent is deleted.

b. It is a fact that the assessee is having huge agricultural land and from the certificate issued by the Tahsildar, it can be safely concluded that the assessee is doing basic agricultural operation also. But again, the amount received while selling the agricultural products and its link to cash deposits made during demonetization is in very much dispute. The assessee could not give any explanation as to why huge cash amounting to Rs.8.79 lakhs was deposited within a span of 14 days during the demonetization period. Ther is sufficient force in the argument of Ld. DR that there is no validity to the certification of agricultural income issued by the Tahsildar because it was issued in 2019 and the agricultural income certificate does not pertain to the current period i.e., 01.04.2016 to 31.03.2017. Moreover, the certificate issued by the Tahsildar clearly shows that it is not valid for any other purposes except for taking bank loan.

11.

The Bench relies on the following decisions to confirm the addition made by Ld.AO.

a. Hon’ble Supreme Court in the case of CIT v. Ramakrishna Deo [1959] 35 ITR 312 (SC), held that entire burden to prove the agricultural income is only on the assessee and the Revenue records alone are not conclusive proof of agricultural income. In the impugned case, the assessee has not proved beyond doubt that the cash deposits are sourced from sale of agricultural produce.

b. Similarly, the Hon’ble ITAT, Hyderabad Coordinate Bench, has taken a decision in the case of Paras Collins Distilleries v. ITO [(2011) 7 ITR 614 (Tribunal)] and held that Village Revenue Officer certificate alone is not sufficient to prove the agricultural income.

c. Similarly, the Hon’ble ITAT, Hyderabad Coordinate Bench in the case of Smt. T. Prapoorna Reddy v. ITO in ITA No. 1514&1607/Hyd/2013 dated 28.08.2014, it was held that pattadar passbook and VRO certificate only establish the land holding but not the agricultural income.

d. Similarly, the Hon’ble ITAT Allahabad Bench, in the case Satya Prakash Gupta v. ACIT in ITA No. 3 to 6/Alld/2022 dated 15.03.2023, has held that when no evidences with regard to purchase of seeds, fertilizers, sale bills of agricultural produce were not produced before the Ld.AO, the addition as unexplained money was upheld.

e. Similarly, in the case of B. Ramachandhiran v. CIT [2014] 43 taxmann.com 430 (Madras), the Hon’ble Madras High court has held that, “if the assessee had any agricultural operation and earned income out of the same, certainly it was always open to the assessee to bring any such material to substantiate the facts. The factual details ought to have been brought before Ld.AO or before the First Appellate Authority, to substantiate the case of the assessee, that he had been in receipt of income earned out of the agricultural operation. In the absence of any material shown or onus discharged, in the manner known to law we do not agree with assessee contentions. In these circumstances, we have no hesitation in rejecting the appeal of the assessee”.

12.

As mentioned above, the assessee was able to establish that there are agricultural lands, and the certificate given by the Tahsildar shows that the assessee is carrying out the agricultural operation and some agricultural produce were sold to A.P. State Civil Supplies Corporation and there is an agricultural loan sanction by the bank and in view of all these circumstantial evidences, it is held that there would be some agricultural income to the appellant. But whether this agricultural income was deposited into the bank account during the demonetization period was not proved by the assessee. In other words, there is no link between the earning of agricultural income and depositing the cash in the bank account within a short span during the demonetization period. After taking into consideration all the facts and circumstances, the Bench decides to confirm the addition to the extent of Rs.8,79,000/- which was deposited into the bank account during the demonetization period as sources of the income are not explained properly and consequently the addition made by Ld.AO under section 69A of the Act is upheld. The remaining amount added by the Ld.AO is deleted by giving benefit of doubt to the appellant that the same may be out of sale of agricultural produce. In other words, the addition made during demonetization period to the extent of Rs.8,79,000/- is confirmed and appellant gets relief of Rs.4,61,250/- out of the total addition of Rs.13,40,250/-

13.

In the result, appeal filed by the Assessee is partly allowed.

Order pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1962 by placing the details on the notice board on 10th July, 2026.

Sd/- Sd/- UDAYAN DAS GUPTA OMKARESHWAR CHIDARA JUDICIAL MEMBER ACCOUNTANT MEMBER Visakhapatnam Dated: 10.07.2026 Giridhar, Sr.PS Copy to:

RAVIPATI GANDHI GOPALAKRISHNA, 3-112 KURRELAGUDEM, 1 ELURU-534401, ANDHRA PRADESH

ITO WARD 2, 2 KKS TOWERS R R PET ELURU, ELURU-534002, ANDHRA PRADESH

3 THE PCIT / CIT, 4 THE D.R., ITAT, VISAKHAPATNAM BENCH 5 GUARD FILE

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