SABBARAPU NARAYANA RAO vs. PR COMMISSIONER OF INCOME TAX-I

APHC010015222024

IN THE THURSDAY TWO T THE HONOURA THE HONOURABLE INCOME TA Between: 1. SABBARAPU NARAY ANJANEYA SWAMY GODAVARI DIST-533 1. PR COMMISSIONER Counsel for the Appellant 1.G V N HARI Counsel for the Responde 1.ANUP KOUSHIK KAR The Court made the follow

1 Judgment reserved o Judgment pronounced Judgment uploaded o

E HIGH COURT OF ANDHRA PRADES AT AMARAVATI (Special Original Jurisdiction) Y,THE FOURTH DAY OF DECEMBER THOUSAND AND TWENTY FIVE PRESENT ABLE SRI JUSTICE BATTU DEVANAN E SRI JUSTICE A. HARI HARANADHA AX TRIBUNAL APPEAL NO: 11/2024 YANA RAO, D.NO.3-71, VOOLAPAL TEMPLE STREET, BIKKAVOLE MAN 3343, ANDHRA PRADESH ...A AND R OF INCOME TAXI, Visakhapatnam. ...RE t: ent: RAVADI wing: on : 11.09.2025 on : 04.12.2025 on : 05.12.2025 H [3545] ND SARMA LI VILLAGE, NDAL, EAST APPELLANT ESPONDENT

THE HONOURABLE SRI JUSTICE BATTU DEVANAND & THE HONOURABLE SRI JUSTICE A. HARI HARANADHA SARMA I.T.T.A.No.11 of 2024 JUDGMENT: (Per Hon’ble Sri Justice A. Hari Haranadha Sarma) Introductory:-

This is an appeal filed under Section 260A of Income Tax Act 1961, questioning the Orders dated17.03.2023 passed in ITA No.217/Viz/2022 on the file of ITAT, Visakhapatnam Bench, Visakhapatnam. Facts that lead to filing of this Appeal:- 2. [a] Appellant is an assessee; he has filed returns in respect of the income derived from his business of sale of fertilizers and pesticides in the name and style of Dhanalakshmi Agencies for the assessment year 2017-18 to 09.06.2017, admitting an income of Rs.5,10,480/-. The assessment was made under Section 143(3) of the Act vide orders dated 16.12.2019 and the total income was assessed at Rs.1,39,50,480/- by the Assessing Officer. [b] The explanation of the assessee was rejected by the Assessing Officer with regard to the sources for cash deposits and made addition of Rs.1,34,40,000/- under Section 69A of the Act towards unexplained cash deposits.

[c] An appeal was filed before the Commissioner of Income Tax by the assessee/appellant and the same was dismissed, vide orders dated 22.09.2022 in ITA No.CIT(A),Visakhapatnam-2/10215/2019-20. Aggrieved by the same, the appellant preferred further appeal before the Income Tax Appellate Tribunal, Visakhapatnam Bench, Visakhapatnam vide I.T.A.No.217/Viz/2022. [d] The Appellate Tribunal confirmed the addition to an extent of Rs.33,00,000/- only, while exempting Rs.1,01,40,000/- after satisfying with the explanation submitted. Contention of the Appellant:- 3. [a] The appellant claims that the amount of Rs.33,00,000/- was deposited in the following pattern: Rs.20,00,000/- on 10.11.2016; Rs.12,00,000/- on 11.11.2016; and Rs.1,00,000/- on 19.01.2017. The explanation submitted in respect of these amounts that they have been received towards capital contribution from partners of M/s.Dhanalakshmi Traders, is not accepted by the Assessing Officer. Leaving the reasons assigned by the Assessing Officer, no separate reasons are assigned by the Commissioner of Income Tax (Appeals) and the explanation is summarily rejected for want of documentary evidence. [b] It is also the contention of the appellant that, before the Appellate Tribunal, the appellant filed confirmation letters of the partners of the firm, with the proof of land holdings of the partners, with an additional evidence in terms of

Rule 29 Income Tax Appellate Tribunal Rules. But the Appellate Tribunal rejected the additional evidence with insufficient reasons and confirmed the orders of the Commissioner of Income Tax (Appeals). Hence, the present appeal. Grounds urged in the present Appeal:- 4. (i) The Appellate Tribunal erred in rejecting the additional evidence on reasons, which are not relevant.

(ii) The Appellate Tribunal overlooked the fact that the partners are owning reasonable extent of agriculture land, and furnished detailed basis of their annual savings.

(iii) The Appellate Tribunal ought to have appreciated the fact that the appellant discharged the initial burden of proving the sources for the cash deposits by furnishing partnership deed and confirmation letters of the partners, therefore, cash deposits of Rs.33,00,000/- shall not be treated as unexplained. 5. Now the substantial question of law that arises for consideration in the facts and circumstances of this case, is:- Whether the Tribunal is justified in rejecting the additional evidence i.e., confirmation letters of the partners of the Firm- Dhanalakshmi Traders, without subjecting the same to any further enquiry and consequently subsisting the addition of Rs.33,00,000/- made by Assessing Officer in terms of Section 69A of the Act, in respect of cash deposits in the bank account of the appellant/assessee?

[ii] With regard to additional evidence, the appellant has placed certain documents claiming that the partners have contributed the amount from agricultural income. There is addition of Rs.35,40,000/- cash deposits into the bank account of assessee as capital of the Firm Dhanalakshmi Traders. But the partnership deed does not contain any recital with respect to capital contribution by the partners.

[iii] There is no explanation as to why capital contribution to the firm is deposited into assessee’s personal account, instead of the Bank account of the partnership Firm, Dhanalakshmi Traders. [iv] The Additional evidence in the form of confirmation letters to the partners though filed creditworthiness of the partners is not established and the income earned by the partners through agricultural sources is not substantiated and that the deposit is into personal account of the assessee but not in the Firm Account. Therefore, the explanation is not acceptable. Analysis, Reasons and Findings:- 10. Upon considering the reasoning of the learned Income Tax Appellate Tribunal, we are of the view that the additional evidence has been overlooked is not correct. The confirmation letters of the partners and the sufficiency as well as credibility of the same is addressed by the Appellate Tribunal. The substantial question of law that, whether the Tribunal is justified in rejecting the confirmation letters of the partners without subjecting them to any further enquiry, is answered against the appellant for the reason that the learned Income Tax Appellate Tribunal assigned justification that the partnership deed is not indicating the contribution of the partners as well as the questioned deposit of capital contribution is into the individual bank account of the assessee but not in the account of partnership firm. Therefore, we are of the view that the Tribunal has properly addressed the aspects that, 1) Partnership deed is not containing capital

contribution, 2) why the capital contribution is deposited into the assessee’s bank account instead of partnership account. Hence, the substantial question of law framed, when examined in the light of the mixed factual and legal situation, in the present case found fit to be answered against the appellant. Accordingly, we answer the question of law framed that addressing and appreciating additional evidence relied on by the Appellate Tribunal is in accordance with law and the impugned orders does not warrant any interference. 11. In view of the reasons stated and discussions made above, the appeal is fit to be dismissed. 12. Accordingly, the appeal is dismissed. No costs. As a sequel thereto, miscellaneous petitions, if any, pending shall stand closed. __________________________ JUSTICE BATTU DEVANAND

__________________________________ JUSTICE A.HARI HARANADHA SARMA Dated: 04 .12 .2025 Pnr

THE HON’BLE SRI JUSTICE BATTU DEVANAND And THE HONOURABLE SRI JUSTICE A. HARI HARANADHA SARMA

I.T.T.A.No.11 of 2024

Dt.04.12.2025

Pnr