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Issues involved: Assessment of additional income u/s 139(2) of the Act, rejection of assessee's plea, refusal to admit additional evidence u/r 46A, confirmation of assessment by CIT(A), justification for admitting additional evidence, ownership of additional income, consistency in assessee's statements, legal contention on validity of statement u/s 131, sustainability of addition as income from brokerage.
The Appellate Tribunal ITAT Mumbai heard an appeal regarding the assessment of additional income u/s 139(2) of the Act. The assessee, now deceased, had declared an income of &8377; 51,900 but later confessed to earning extra income of &8377; 1,70,000 during the accounting period. The Assessing Officer brought this amount to tax as the assessee's income. On appeal, the assessee explained that the money collected was for a specific purpose and did not belong to him. The CIT(A) rejected additional evidence and confirmed the assessment, leading to further appeal by the assessee (para 2-5). The Tribunal found the CIT(A) unjustified in refusing to admit crucial additional evidence, which included statements and affidavits supporting the assessee's claim. The Tribunal emphasized the importance of admitting such evidence in the interest of justice. The Tribunal noted that the evidence provided by the assessee consistently showed that the money did not belong to him, supported by statements from various individuals and the circumstances surrounding the case (para 6-9). The Tribunal also upheld a legal contention raised by the assessee regarding the validity of the statement made u/s 131, emphasizing that without pending proceedings, such a statement lacks evidentiary value. Additionally, the Tribunal highlighted that the sudden increase in income claimed by the Assessing Officer was incongruous with the assessee's previous income from brokerage, as evidenced by past assessments. Therefore, the Tribunal canceled the addition of &8377; 1,70,000 and allowed the appeal (para 10-12).
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