2017 (10) TMI 1359 - AT - Income Tax

Condonation of delay in filling appeal - bonafide reason and compelling circumstances beyond control of the appellant - as submitted the assessee was under judicial custody - Held that - The facts with regard to the assessee s judicial custody between 2010-2015 was not disputed by the lower authorities. CIT(A) though has given number of hearings the assessee could not attend the hearing for the reasons beyond his control. No doubt the assessee has to appear before the authorities if he is interested in prosecuting his appeal and file necessary evidence to justify his case. In this case the reasons quoted by the assessee for not appearing before CIT(A) is no doubt beyond his control. Thus the issue needs to be re-examined by the AO in the light of the fact that the assessee was not able to appear during the assessment proceedings and appellate proceedings and also additional evidences filed by the assessee - decided in favour of assessee for statistical purposes.

Summary

Issues:
1. Condonation of delay in filing appeal.
2. Treatment of expenses incurred on behalf of the company.
3. Classification of rent income and disallowance of actual expenses.
4. Addition of cash deposited in the bank.
5. Disallowance on an ad hoc basis.

Condonation of Delay in Filing Appeal:
The appellant sought condonation of a 55-day delay in filing the appeal due to being in judicial custody from 2010 to 2015. The Tribunal considered the reasons for delay and the fact that the appellant was acquitted in 2015. The delay was condoned, and the appeal was admitted for adjudication.

Treatment of Expenses Incurred on Behalf of the Company:
The appellant contested the addition of expenses incurred on behalf of the company, arguing that these were already accounted for in the company's books. The Tribunal directed a re-examination of the issue by the Assessing Officer (AO) considering additional evidence filed by the appellant.

Classification of Rent Income and Disallowance of Actual Expenses:
The appellant challenged the treatment of rent income as income from house property and the disallowance of actual expenses incurred for earning rental income. The Tribunal set aside the matter to the AO for re-examination, emphasizing that the appellant's inability to appear before authorities necessitated a fresh review.

Addition of Cash Deposited in the Bank:
The addition of cash deposited in the bank was contested by the appellant. The Tribunal directed the AO to reconsider the issue in light of additional evidence and after affording a reasonable opportunity of hearing to the appellant.

Disallowance on an Ad Hoc Basis:
The appellant disputed the ad hoc disallowance without considering the case's specifics. The Tribunal allowed the appeal for statistical purposes, indicating a need for a re-evaluation by the AO based on the additional evidence presented by the appellant.

This detailed analysis of the judgment covers the various issues raised by the appellant and the Tribunal's decisions on each matter, ensuring a comprehensive understanding of the legal proceedings and outcomes.