Bathina Srilakshmi vs. Income Tax Officer, Nellore & Anr., Andhra Pradesh High Court, ITA No. 53/2025, Decided on 06th March 2026

The Andhra Pradesh High Court dismissed the appellant’s appeal and upheld the Income Tax Appellate Tribunal (Hyderabad ‘B’ Bench)’s order dated 16 May 2025, affirming the addition of Rs. 1,82,34,150/- as unexplained income from undisclosed sources for Assessment Year 2014-15. The facts reveal that the appellant had filed a return declaring income of merely Rs. 2,48,490/-, but during assessment proceedings, the Assessing Officer found that despite having a cash balance of Rs. 2,01,83,834/- as on 01 March 2014, the appellant had made cash payments exceeding the available balance, resulting in a negative cash balance of Rs. 1,82,34,150/- as on 26 March 2014.

To explain this deficit, the appellant’s case underwent a telling evolution: at the assessment stage, she claimed to have received cash gifts from unidentified “others” and produced only self-signed receipt vouchers without furnishing the identity, creditworthiness, or reasons for the gifts from such persons; at the appeal stage before the CIT(A), she changed her stand and claimed the entire Rs. 1.83 crore was a cash gift from her grandmother received on 05 March 2014, allegedly funded by the grandmother’s withdrawal of Rs. 3.5 crore from her capital account in M/s. R.R. Estates and Projects, Bangalore a firm that had not filed its income tax return for AY 2014-15.

While the CIT(A) accepted the grandmother’s declaration and allowed the appeal, the Tribunal reversed this finding, holding the gift claim unbelievable given the suspect source of funds in the grandmother’s hands and the glaring inconsistency between the appellant’s two contradictory positions. The High Court agreed with the Tribunal on both counts that is first, that the source of funds in the grandmother’s hands was never established before any authority; and second, that had the grandmother truly been the donor, the appellant would not have vaguely described the source as “others” at the assessment stage and accordingly dismissed the appeal, finding no ground to interfere with the Tribunal’s well-reasoned order.