VENKATESH,VANIYAMBADI vs. ITO, VELLORE

ITA 2011/CHNY/2026Status: DisposedITAT Chennai07 October 2026AY 2017-188 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) did not undertake a detailed examination of the issues on merits, relying primarily on the assessee's failure to controvert the Assessing Officer's findings. The Tribunal noted that substantial documentary evidence was claimed to have been furnished by the assessee, which required examination and a reasoned finding, especially given the significant additions and the assessee's dispute of the character and source of the amounts. The Tribunal also found merit in the assessee's plea of not being afforded an adequate opportunity. Consequently, the Tribunal set aside the CIT(A)'s order and restored the matter to the Assessing Officer for de novo adjudication. The Assessing Officer was directed to examine the issues afresh, providing an effective opportunity to the assessee to submit evidence regarding the source and nature of deposits, business receipts, agricultural income, and alleged double taxation. The Tribunal explicitly stated it was not expressing any opinion on the merits of the additions or the assessee's claims.

What were the facts?

The assessee, Venkatesh, filed an appeal against the order of the CIT(A) which upheld the assessment order passed by the Income Tax Officer under sections 147 and 144 of the Income Tax Act, 1961, for Assessment Year 2017-18. The Assessing Officer initiated reassessment proceedings based on information regarding cash deposits of approximately Rs. 57.37 lakh and time deposits of Rs. 1,10,59,890/-. The assessee contended that the cash deposits were business receipts from agricultural produce trading, disclosed under section 44AD, and that fixed deposit maturity amounts represented accumulated agricultural income. The Assessing Officer made additions of Rs. 57,37,000/- for unexplained money and Rs. 50,00,000/- for fixed deposit maturity amounts under section 69A read with section 115BBE, and also added interest income. The CIT(A) confirmed these additions, stating the assessee failed to controvert the AO's findings.

What were the issues?

1. Whether the CIT(A) erred in confirming the addition of Rs. 57,37,000/- as unexplained cash deposits under section 69A of the Act, and Rs. 50,00,000/- towards fixed deposit maturity amounts, without properly appreciating the land records, confirmations, and affidavits submitted by the assessee, and without cross-examination, thereby violating principles of natural justice. The assessee argued that these deposits represented business receipts already considered under section 44AD and accumulated agricultural income, respectively. The revenue contended that affidavits and confirmations alone cannot establish genuineness, relying on Ayaaubkhan Noorkhan Pathan v. State of Maharashtra & Ors. 2. Whether the assessment order and subsequent appellate order suffered from a violation of the principles of natural justice due to the lack of a proper and effective opportunity to the assessee to substantiate claims and the failure to properly examine the evidence furnished.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 69A,Section 115BBE,Section 44AD,Section 148,Section 143(2),Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI MANU KUMAR GIRI & SHRI S.R.RAGHUNATHA

Hearing: 05.10.2026

PER MANU KUMAR GIRI, JM:

This appeal filed by the assessee is directed against the order dated 10.02.2026 passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “the Ld. CIT(A)”], arising out of the assessment order passed u/s. 147 read with section 144 of the Income Tax Act, 1961 Venkatesh Vs ITO W-3 (hereinafter referred to as “the Act”) for the Assessment Year 2017-

18.2.

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The order continues below.

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