Muthukuru Venkata Subba Rao Vs ITO (ITAT Hyderabad)
CIT(A) Ignored Evidence – ITAT Remands ₹15.55 Cr Addition on Joint Bank Account for Fresh Verification, Cites Violation of Natural Justice; Director’s Liability on Company Funds: ITAT Remands Case to Verify Ownership of Bank Deposits
Assessee, an individual & Director in M/s Evergreen Entertainers Pvt. Ltd., did not file return of income as his salary income was only ₹52,000. The AO reopened the case u/s 147 after noticing huge credits of ₹9.61 crore in a joint bank account with Andhra Bank, where the joint holders were the company, another individual, & the Assessee. The AO treated total deposits of ₹15.55 crore as unexplained investment in the hands of the Assessee & completed assessment u/s 144/147.
Assessee’s Case:
- The bank account primarily belonged to Evergreen Entertainers Pvt. Ltd.
- Assessee was only an authorised signatory/joint holder as a director for operational convenience.
- All deposits were business transactions of the company, not his personal income.
- Filed ledger accounts, confirmations from the company & payers, bank statements, balance sheet extract (Schedule 10B) showing the account disclosed in company books.
- Submitted replies & documents to CIT(A) through e-portal (with acknowledgments dated 03.01.2023 & 05.2024).
CIT(A) Decision:
- Dismissed appeal stating no evidence was furnished, the bank account not shown in company’s return, & held the Assessee liable as joint holder.
- Confirmed the addition of ₹15.55 crore.
ITAT Findings:
1. CIT(A)’s statement that no evidence was filed is factually wrong; record shows multiple submissions with documents.
