Greentime Projects Private Limited Vs ITO (ITAT Hyderabad)
In this case, the assessee company challenged the order of the Commissioner of Income Tax (Appeals) [CIT(A)] sustaining an addition of ₹36,50,000 made by the Assessing Officer (AO) towards an alleged difference in closing work-in-progress (WIP). Before examining the merits, the Income Tax Appellate Tribunal (ITAT), Hyderabad, considered a delay of 64 days in filing the appeal. The assessee explained that the appellate order dated 17.07.2025 came to the notice of its director only in the first week of October 2025 when he checked the Income-tax portal. Since no further notices had been received for a considerable period after submissions were filed and the director believed the appeal was still pending, the delay occurred unintentionally. Accepting the explanation as bona fide and constituting reasonable cause, the Tribunal condoned the delay and admitted the appeal.
On merits, the assessee had originally filed its return for AY 2011-12 declaring income of ₹10,45,817. The assessment was reopened after information received during a search in another case indicated a discrepancy in the assessee’s closing stock. According to impounded material, the closing work-in-progress was shown at ₹1,21,50,000, whereas the audited balance sheet reflected ₹85,00,000. The AO observed that the unaudited financial statements generated from Tally software showed closing WIP of ₹85,00,000 in the profit and loss account but ₹1,21,50,000 in the balance sheet. Although the assessee explained that the difference of ₹36,50,000 represented opening work-in-progress that had been incorrectly added in the unaudited statements and subsequently corrected during finalisation and audit of accounts, the AO rejected the explanation and added ₹36,50,000 to income. The CIT(A) upheld the addition on the ground that the assessee failed to reconcile the discrepancy with sufficient supporting evidence.
