MUTHUKURU VENKATA SUBBA RAO,NELLORE vs. ITO., WARD -1, NELLORE

5. Learned CIT-APPEALS failed to appreciate that the appellant was an employer director of EVERGREEN and had nothing to do with the bank account of his employer company

6. Learned CIT-APPEALS erred in merely repeating the observations of the assessing officer (para 4 of the assessment order) in page 13 of the appellate order without verifying appellant's submission of the evidence that the bank account no: 038411011005400 had been accounted in the books of EVERGREEN

7. Learner CIT-APPEALS erred in stating that no supporting documents were submitted by the appellant in the appellate proceedings to verify appellant's claim in spite of multiple opportunities. (on page 14 of the appellate order). Learned CIT- APPEALS ought to have appreciated the evidence submitted by the appellant vide letter dated August 10, 2024,

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8. Learned CIT-APPEALS erred in holding that appellant has failed to justify the source of huge credit made to the bank account.

9. Learned CIT-APPEALS erred in affirming the AO's conclusion of the assessment u/sec 144 of the Income Tax Act (on the pretext of time barring) without verifying the evidence submitted by the appellant.

10. Learned CIT-APPEALS erred in disregarding the evidence submitted by the appellant regarding the accounting of the bank account in the books of EVERGREEN. Learned CIT-APPEALS failed to note that the AO did not make any independent verification of the evidence submitted by the appellant, thereby violating principles of natural justice. 11. Learned CIT-APPEALS erred in confirming the addition of Rs.15,00,55,000/- as Unexplained Investments without duly considering the sufficient evidence furnished by the appellant, including ledger extracts, confirmations and bank statements, which substantiate appellant's contention that the bank account did not belong to him. 12. Learned CIT-APPEALS failed to conduct an independent verification of whether the bank account no : 038411011005400 belonged to the appellant or whether appellant acted as mere joint holder and authorised signatory of the account and instead affirmed the AO's conclusions without proper examination or due application of mind. For these and other grounds that may be adduced at the time of hearing, it is most humbly prayed that the Hon'ble Tribunal be pleased to delete the addition made as unexplained Investments and thus render justice.”

4 ITA.No.390/Hyd./2025 with Andhra Bank along with M/s. Evergreen Entertainers Pvt. Limited. The Assessing Officer reopened the assessment of the assessee based on the information that huge credits were found in the said bank account to the extent of Rs.9.61 crores during the period from 01.09.2012 to 15.09.2012. Before the Assessing Officer, the assessee has explained that the transactions in the bank account pertains to the Company viz., M/s. Evergreen Entertainers Pvt. Limited and assessee being the Director was only a joint holder for the convenience and operation of the account, but, no transactions in the bank account was carried-out by the assessee. This explanation of the assessee was not accepted by the Assessing Officer while framing the assessment and thereby, made addition of Rs.15,55,00,000/- as unexplained investment of the assessee.

4. The assessee challenged the action of the Assessing Officer before the learned CIT(A). However, the appeal of the assessee was dismissed by the learned CIT(A)

5 ITA.No.390/Hyd./2025 for want of supporting documentary evidences to explain the source of deposits/credits in the bank account.

7 ITA.No.390/Hyd./2025 to notice dated 22.04.2024, the assessee again re-submitted the supporting documents vide e-proceeding acknowledgment dated 18.05.2024 which is placed at pages-18 and 19 of the paper book. Despite all the documentary evidences filed by the assessee, the learned CIT(A) has dismissed the appeal on the ground that the assessee has not filed any supporting evidences. Thus, the learned AR submitted that the impugned order of the learned CIT(A) is not sustainable and liable to be set-aside. He has submitted that the additional evidences filed by the assessee before the learned CIT(A) may be considered as supporting evidences to explain the source of the deposits in the said bank account which belongs to the Company M/s. Evergreen Entertainers Pvt. Limited and assessee has lend his name as Joint Account Holder for the convenience of operating the said bank account.

8 ITA.No.390/Hyd./2025 1961 [in short "the Act"] nor in response to notice issued u/sec.148 of the Act. The assessee is undisputedly a Joint Holder of the Bank Account and was also a Director of the said Company and, therefore, the assessee was very much in position to furnish all the relevant details to explain the source of the credits in the said bank account. The assessee has failed to furnish any supporting evidences either before the Assessing Officer or before the learned CIT(A). He has further submitted that the said Company M/s. Evergreen Entertainers Pvt. Limited has not disclosed the bank account in question in the return of income and, therefore, the Assessing Officer was justified in making the addition on account of the deposits/credits in the said bank account in the hands of the assessee. The Learned DR further submitted that the alleged documentary evidences filed by the assessee before the learned CIT(A) was not filed before the Assessing Officer. Therefore, it was in the nature of additional evidences and assessee has not sought permission as required under Rule 46A of Income Tax Rules, 1962 for filing the additional evidences. Thus, the 9 ITA.No.390/Hyd./2025 learned CIT(A) has rightly not considered the additional evidences filed by the assessee.

“3. The information furnished by the assessee is carefully considered. The assessee in his submission stated that account No. 38411011005400 is pertaining to the Company M/s Evergreen Entertainers Pvt. Limited in which he is the Director of the company and he was one of the authorized signatory in the capacity of director of the company. Further, he submitted that he has received salary income of Rs.52,000/- during the F.Y.2012-13 relevant to the A.Y.2013-14. Further, he has stated that the account No. 03841101105400 with Andhra Bank, Nellore is related to the M/s Evergreen Entertainers Pvt. Ltd company and further stated that the account is no way connection with his personal transactions. He stated that no payment is received by him and no transfer had been done by him. In support of his claim he had furnished the bank accounts of account No. 38411011005400 (account of M/s Evergreen Entertainers Pvt.Ltd) and account No.018910011013327 (his personal account).

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12 ITA.No.390/Hyd./2025 9.1. Though, the assessee has not filed the return of income, but, the income of the assessee other than the said deposits in the bank account was only Rs.52,000/- and, therefore, except, the deposits in the bank account, the assessee’s income was below the limit of taxable income. The learned CIT(A) has dismissed the appeal of the assessee by recording the reasons in pages 13 and 14 of the Order as under :

“During the course of appeal proceedings, the appellant filed the submission and same has been perused carefully. It is pertinent to note that the bank account bearing no. 038411011105400 maintained with Andhra Bank, Nellore is jointly held by M/s Evergreen Entertainers Pvt Ltd & Shri Yella Vijaya Bhaskara Reddy & the appellant Sri MV Subba Rao which is evident from the preamble of the bank account statement. Further, thorough analysis of return of income of the company Mis Evergreen Entertainers Pvt Ltd for the A.Y. 2013-14 had been filed declaring NIL income on 28.09.2013 and also found that the bank account bearing no. 038411011105400 maintained with Andhra Bank, Nellore is not disclosed in schedule BA also. As the appellant is joint holder of the company, he cannot deny the transaction found in the bank account statement. It is crystal evident that each and every transaction whether credit or debit whether withdrawal or transfer can't be executed without

13 ITA.No.390/Hyd./2025 the knowledge of the appellant. Further, it is pertinent to note that the appellant stated in his written submission that he is one of the authorized signature in the capacity as a director of the company. It is clearly fixes the responsibility that the appellant has to explain each and every transaction found in the bank statement pertaining to F.Y. 2012-13 relevant to the A.Y. 2013-14. Being joint holder of the account, the appellant is also liable to explain the transaction found the bank statement. During the appeal proceedings, no supporting documentary have been submitted by the appellant to verify the claim in-spite of multiple opportunities being provided by this office as stated above. In view of above facts and the considering the explanation of the appellant, it is clear that the appellant has failed to justify the transactions based on which addition was made to income during the assessment proceedings. It is crystal clear evident that the appellant has failed to justify the source of huge credit made to bank account. The contention of the appellant remained unjustified and unsubstantiated. Hence, the Assessment Order is upheld the ground is noted as disallowed.”

9.2. The learned CIT(A) has given the reasons that the said bank account was not disclosed by the said company M/s. Evergreen Entertainers Pvt. Limited in the return of income in Schedule-BA. However, we find from the Schedule-10(b) of the balance-sheet of the said company

14 ITA.No.390/Hyd./2025 placed at page-87 of the paper book that their bank accounts including bank account in question with Andhra Bank are duly reported in the balance-sheet of the said Company along with the closing balances under the Head “Cash and Equivalent to Cash”. Therefore, in the return of income, the bank account which was reported by the said Company for the purpose of refund may not be the bank account in question of the said company. In any case, that is a matter of assessment in the hands of the said company. Further, the learned CIT(A) has given reasons that no supporting documentary evidences has been submitted by the assessee to verify the claim in spite of multiple opportunities being provided by the O/o. CIT(A). This observation and statement of the learned CIT(A) is contrary to the record and facts as the assessee has responded to the notices issued by the learned CIT(A) vide acknowledgments placed at pages 16 to 19 of the paper book as under :

15 ITA.No.390/Hyd./2025 16 ITA.No.390/Hyd./2025 17 ITA.No.390/Hyd./2025

18 ITA.No.390/Hyd./2025 9.3. Thus, as per the above acknowledgment, it is clear that all supporting documents were filed by the assessee vide reply dated 03.01.2023 and 18.05.2024. It is also evident that the assessee has filed written submissions, confirmation letters of the said Company, bank account statement, ledger account and bank statements as well as the details of the said deposits of Rs.15,55,00,000/-. Thus, in view of the fact that the assessee has filed all these documents and the learned CIT(A) has not considered these documents while passing the impugned order. Though, the assessee was required to seek permission of the learned CIT(A) under Rule 46A of the I.T. Rules, 1962 for filing the additional evidences first time before the Appellate

19 ITA.No.390/Hyd./2025 Authority. However, the learned CIT(A) ought to have decide the fate of the additional evidences while passing the impugned order. Therefore, in the facts and circumstances of the case, we are of the considered view that the learned CIT(A) has passed the impugned order without considering the relevant evidences filed by the assessee to explain the nature of transactions as well as the source of the deposits of credits in the bank account in question which is highly arbitrary and not sustainable. Accordingly, we set-aside the order of the learned CIT(A) and since the assessee has filed the additional evidences first time before the learned CIT(A) which has not been examined either by the learned CIT(A) or through any remand proceedings, therefore, the matter is remanded to the file of Assessing Officer for proper verification and examination of the additional evidences filed by the assessee and then, pass a fresh order, after giving opportunity of being heard to the assessee.

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Order pronounced in the open Court on 15th October, 2025.