PABBAREDDY KODANDARAMIREDDY,NELLORE vs. INCOME TAX OFFICER, WARD-2, NELLORE

The brief facts of the case are that, the assessee is an individual filed his return of income for the assessment year 2017-18 on 31.03.2018 declaring an income of Rs. 8,52,190/-. The case has been selected for scrutiny through CASS to verify the sources for the cash deposits made during the year, capital gains/loss on sale of property, and cash deposit and transaction in property. During the course of assessment proceedings, the A.O. called upon the assessee to furnish relevant evidences for cash deposits and also source for capital contribution to partnership firm Global Developers. In response, the assessee submitted that, he has received loans from various persons and filed a list of loan creditors of 745 persons and claimed that, he has received loan of Rs. 1,42,25,000/-. The assessee further submitted that, the source for capital contribution to partnership firm is out of advances received from various persons for sale of property. The assessee has furnished confirmations from 97 parties regarding hand loans and also confirmations from parties from whom the assessee claimed to have received advances for sale of property. The A.O., after considering the relevant submissions of the assessee and also taking note of confirmation letter filed by the assessee, observed that, although the assessee has filed

Aggrieved by the assessment order, the assessee preferred appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee had reiterated the submissions made before the A.O. and claimed that he has received loans from various persons for which confirmations from parties have been furnished. The assessee further claimed that, he has received advances for sale of property from various persons for which confirmation letter along with sale agreement copies has 4 P. Kodandaramireddy been furnished. The Ld. CIT(A), after considering the relevant submissions of the assessee and also taking note of the reasons given by the A.O., rejected the explanation of the assessee and sustained the addition made by the A.O. towards unexplained money under Section 69 of the Income Tax Act, 1961 towards cash deposit into bank account and also addition towards unexplained investment under Section 69 of the Act.

Aggrieved by the order of Ld. CIT(A), the assessee is now in appeal before the Tribunal.

The learned counsel for the assessee, Shri K.A. Sai Prasad, referring to the assessment order and appellate order, submitted that, although the assessee has furnished confirmation letters from the parties to prove the loans and advances from parties, but the Ld. CIT(A) has rejected the explanation of the assessee only on the ground that, the assessee could not file further evidence in the form of sale agreements along with other proofs to establish advances received from various parties for sale of property. Further, the assessee is now filing copies of sale agreements in respect of advances received from various parties and the same could not be filed before the lower authorities. Therefore, he submitted that, the 5 P. Kodandaramireddy matter may be remanded to the file of the A.O. to give one more opportunity of hearing to explain his case with relevant evidences.

The Ld. CIT-DR for the Revenue, Dr. Narendra Kumar Naik, on the other hand, supporting the order of Ld. CIT(A), submitted that, it is an admitted fact that, the assessee has furnished confirmation from certain parties, however, could not file further evidence to substantiate the claim of advances received from parties. Further, the assessee now claims that he has furnished copies of sale agreements with the parties from whom he had received advances for sale of property. Since the additional evidences filed by the assessee were not filed before the Ld. CIT(A), the matter may be remanded back to the file of A.O. to give one more opportunity to explain its case.

We have heard both parties, perused the material available on record, and had gone through the orders of the authorities below. The A.O. made addition towards cash deposits in the absence of relevant explanation from the assessee to prove the source for such cash deposit with evidences. Although the assessee had furnished confirmation from certain parties, but the A.O. did not accept the 6 P. Kodandaramireddy confirmation letters in the absence of further evidences. Similarly, the A.O. made addition towards advances claimed to have been received by the assessee to explain source for capital contribution in partnership firm i.e., Global Developers on the ground that, the assessee could not furnish further evidences in the form of sale agreements to substantiate the claim of advances received from various parties. The learned counsel for the assessee admitted the fact that the assessee could only file confirmation letters from parties, however, could not furnish relevant agreement to sell to prove the creditworthiness of the persons from whom the assessee claims to have received the advances for sale of property. The learned counsel for the assessee further claimed that, the assessee has now obtained the relevant sale agreements with the parties from whom the advances have been received and the same needs to be verified by the A.O. We find that, the assessee has furnished application for admission of additional evidences along with the details of names and addresses of the persons, along with the agreement of sale to prove receipt of advances from various parties to explain the source of capital contribution to partnership firm. Since the assessee has furnished additional evidence in the form of 7 P. Kodandaramireddy copies of sale agreements and the same were not furnished before the A.O. and Ld. CIT(A), in our considered view, the additional evidences filed by the assessee needs to be admitted and the matter should be remanded to the file of the A.O. for further verification. Thus, we set aside the order passed by the Ld. CIT(A) and remand the issue back to the file of the A.O. The A.O. is directed to redo the assessment de novo after providing another opportunity of hearing to the assessee to explain his case with relevant evidences to substantiate the source for cash deposits into bank account and also source for capital contribution into partnership firm.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 11th March, 2026. श्री विजय पाल राि (VIJAY PAL RAO) उपाध्यक्ष /VICE PRESIDENT (मंजूनाथ जी) (MANJUNATHA G.) लेखा सदस्य/ACCOUNTANT MEMBER

निर्धाररती/The Assessee : Pabbareddy Kodandaramireddy, 1st Floor, R.R. Street, Nellore – 521001, Andhra Pradesh. 2. रधजस्व/ The Revenue : The Income Tax Officer, Ward -2, Nellore. 3. The Principal Commissioner of Income Tax, Tirupati. 4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण, हैदरधबधद / DR, ITAT, Hyderabad 5. गधर्ाफ़धईल / Guard file