9911796707
|
Home
Issues involved: Appeal against CIT(A) order for assessment year 2004-05 regarding addition of unexplained opening balance of capital by AO.
Summary: The appeal was filed by the Revenue against the order of the CIT(A)-VII, Hyderabad, for the assessment year 2004-05. The Assessee, an individual deriving income from other sources, was part of M/s Sunder Steel Ltd Group of Cases where search & seizure proceedings took place. The AO assessed the Assessee's income at a higher amount by adding an unexplained opening balance of capital. Assessee contended before the CIT(A) that the AO wrongly added the opening capital without considering the information provided. The CIT(A) observed that the AO's basis for the addition was incorrect as the amount in question was actually a closing balance, not an opening one. Referring to section 68 of the IT Act, the CIT(A) directed the AO to delete the addition. The Revenue, aggrieved by the CIT(A)'s order, raised multiple grounds of appeal. The learned DR argued that the AO rightly made the addition due to lack of details from Assessee, while the counsel for Assessee relied on the CIT(A)'s order. After hearing both parties and examining the records, the ITAT Hyderabad noted that the AO's addition was based on a wrong premise as the amount was a closing balance, not an opening one. The ITAT upheld the CIT(A)'s decision to delete the addition, stating that the AO had made the addition without proper basis. It was also highlighted that the AO had accepted similar balances in earlier and later years, making the addition in this particular year unjustified. Therefore, the ITAT confirmed the CIT(A)'s order and dismissed the Revenue's appeal. In conclusion, the ITAT Hyderabad upheld the CIT(A)'s decision to delete the addition of the unexplained opening balance of capital, dismissing the Revenue's appeal for the assessment year 2004-05.
|
