ITAT Remands Rs. 1.11 Crore Cash Deposit Case for Fresh Verification After Admitting Additional Evidence

Smt. Padmalatha Vojjala filed an appeal before the Income Tax Appellate Tribunal (ITAT) Hyderabad against the Income Tax Officer, challenging an order passed by the CIT(A)/NFAC Delhi on June 18, 2025, for the Assessment Year 2019-20.

Vojjala did not file any income tax return (ITR) for the relevant assessment year under section 139 of the Income Tax Act, 1961. The assessing officer (AO) chose the return for scrutiny on the grounds that Vojjala had made cash deposits amounting to Rs. 11,150,000 in Agrasen Co-operative Urban Bank Ltd. during the relevant previous financial year and did not report the source of them to the tax department. In conclusion, AO treated the amount as unexplained income under section 69A of the Act and completed the assessment under section 147/144B of the Income Tax Act 1961 and declared the total income of Vojjala at Rs. 1,12,30,410.

The dissatisfied Vojjala filed an appeal before the CIT(A), challenging the decision of the tax officer; however, the CIT(A) ruled in favour of the tax department by upholding the addition made by Revenue on the grounds that the taxpayer did not produce relevant evidence explaining the source of income.

Vojjala thereafter filed an appeal before ITAT Hyderabad, wherein Vojjala claimed that during the appellate proceedings, she did not have relevant evidence to explain the source of income and hence filed additional evidence before the Tribunal along with a petition under Rule 29 of the ITAT Rules seeking admission of the same.

As per the tribunal, “The assessee has filed copies of Adangal/Pahani, receipts for cash received from alleged purchasers, and an unregistered agreement purportedly relating to the sale of agricultural land. These documents were not produced before either the Ld. AO or the Ld. CIT(A).” The tribunal noted that these were crucial for deciding the key dispute in the present case, i.e., “whether the cash deposits of Rs. 1,11,50,000 represent sale proceeds of inherited agricultural land.” However, Vojjala had explained the reason behind not producing relevant documents due to unavailability and genuine circumstances. Considering the reasons explained by the assessee as genuine, the tribunal admitted the additional evidence under Rule 29 of the ITAT Rules.

However, the Tribunal noticed problems in the documents. The dates in the agreement and cash receipts do not match, and most of the cash was received in a different financial year. Also, the buyers who allegedly paid large amounts in cash were never verified. There is also no clear proof of proper inheritance of the land from the assessee’s father or a valid sale to the buyers.

Since these issues need detailed checking and were not examined earlier, the Tribunal has remanded the case to AO for fresh adjudication. The AO has been directed to verify the documents, buyers, land ownership, and transactions, and then pass a fresh reasoned order after giving the assessee a proper hearing. As a result, the appeal was allowed for statistical purposes.