Vara Prasad Didla Vs. Assistant Commissioner of Income Tax, Circle-3(1), Visakhapatnam

Parties Involved

Facts Summary

The assessee, Vara Prasad Didla, filed his return of income for the Assessment Year 2017-18, admitting a total income of Rs. 21,23,540/-. The case was selected for limited scrutiny under CASS due to large cash deposits during the demonetization period and discrepancies in reported income. The Assessing Officer issued notices under sections 143(2) and 142(1) of the Income Tax Act, 1961, seeking information and documents. Despite multiple notices, the assessee failed to provide verifiable evidence for his claims, leading to the Assessing Officer computing long-term capital gains and assessing the LTCG at Rs. 5,65,500/-. The Assessing Officer also treated a difference of Rs. 36,22,000/- as unexplained money under section 69A of the Act and taxed it under section 115BBE. The assessee appealed to the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre (CIT(A)-NFAC), which confirmed the addition made by the Assessing Officer. The assessee then appealed to the Income Tax Appellate Tribunal (ITAT).…

Legal Issues

• 1. Whether the Assessing Officer was justified in treating Rs. 36,22,000/- as unexplained deposits and taxing it under section 69A and section 115BBE of the Act.
• 2. Whether the Assessing Officer was justified in re-computing the LTCG returned by the assessee.
• 3. Whether the Assessing Officer was justified in rejecting the claim for indexed cost of construction of building.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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