2017 (3) TMI 683 - AT - Income Tax

Addition u/s 68 - cash deposit into the bank accounts - surrender of income u/s 44AD by filing revised computation of income - The assessee offered 5% of the sale proceeds deposited in the bank account - assessment u/s.153A r.w.s. 143(3), post search - Held that - We find that the entire credit has been added by the learned Assessing Officer u/s.68 of the Act. Though, the learned CIT(A) has granted some part relief to the assessee, but fact remains that the payments have been made by the assessee to certain textile parties, therefore, the facts has not been appreciated in a justified manner, consequently, to put an end to the litigation, we are of the view that it will meet the ends of justice if the total addition is restricted to 25% of the cash deposited by the assessee in his bank account. It is worth mentioning here that the assessee has agreed to the above conclusion / addition. Thus, the appeals of the assessee are partly allowed.

Summary

Issues:
- Condonation of delay in filing appeals before the Tribunal.
- Addition of income from other sources under section 68 of the Income Tax Act.
- Justification of total addition based on cash deposits in bank accounts.

Condonation of Delay:
The assessee challenged impugned orders confirming income from other sources for A.Y. 2009-10 to 2012-13, citing a 24-day time-barred appeal. The Tribunal considered the reasons for delay, emphasizing the need for a liberal approach in condoning delays caused by bona fide reasons. Referring to legal precedents, the Tribunal highlighted the importance of substantial justice over technical considerations and ultimately condoned the delay, ensuring justice is not denied due to technicalities.

Addition of Income under Section 68:
The Assessing Officer added income under section 68 of the Act, alleging unexplained credits. The CIT(A) partially deleted some additions, but the Tribunal found the payments to textile parties were not appropriately considered. To resolve the matter, the Tribunal restricted the total addition to 25% of cash deposits in the bank accounts for each assessment year, providing a detailed breakdown of the revised additions. The assessee agreed to this conclusion, leading to the partial allowance of the appeals.

Justification of Total Addition:
The Tribunal analyzed the income declarations and assessment details for each assessment year, noting discrepancies in the treatment of payments made by the assessee to textile parties. By limiting the total addition to 25% of cash deposits in bank accounts, the Tribunal aimed to end the litigation and ensure justice was served. The assessee's agreement with this decision led to the partial allowance of the appeals.

In conclusion, the Tribunal addressed the issues of delay condonation, addition of income under section 68, and the justification of total additions, ultimately partially allowing the appeals and providing a detailed rationale for its decision.