Srirangarao Nadipally Vs ACIT (ITAT Hyderabad)
Accepted Closing Cash Cannot Be Treated as Unexplained Opening Balance — ITAT Hyderabad Grants Partial Relief, Orders Remand on Other Issues
The Hyderabad Bench of the ITAT partly allowed the assessee’s appeal for AY 2016-17, holding that an opening cash balance accepted in scrutiny assessment of the earlier year cannot be treated as unexplained in the subsequent year, while remanding issues relating to agricultural income and loan from mother for fresh verification.
Key findings of the Tribunal:
- Opening cash balance of ₹91.22 lakh deleted: The assessee had disclosed a closing cash balance of ₹91,22,287 as on 31-03-2015 in the return for AY 2015-16, which was subsequently accepted in a complete scrutiny assessment u/s 143(3) without any adverse remark. The Tribunal held that such accepted closing balance attains finality and cannot be doubted as unexplained opening cash in AY 2016-17.
- Agricultural income of ₹9 lakh remanded: Though the assessee owned substantial agricultural land and had disclosed similar agricultural income in earlier years, no documentary evidence (crop details, lease agreements, receipts, etc.) was produced for the year under appeal. The issue was therefore restored to the AO for fresh examination after giving opportunity to the assessee.
- Loan from mother (₹9.50 lakh) remanded: While the lender (mother) was an income-tax assessee with disclosed capital, the Tribunal held that availability of cash on the exact date of advancing the loan and proper confirmation had not been conclusively proved. The matter was remitted to the AO for verification of identity, creditworthiness and genuineness.
- CIT(A)’s order found non-speaking on key aspects: The Tribunal noted that confirmations and earlier-year records were not properly appreciated.
Accordingly, the appeal was allowed for statistical purposes, with deletion of the opening cash addition and remand of the remaining two additions for de novo adjudication.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
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