2017 (4) TMI 519 - AT - Income Tax

Addition of deposits as undisclosed income - Held that - We find that there were three credits in the said Dena bank received by the assessee viz. Salary income, commission income and interest income which was claimed by the assessee to be declared by the assessee in the return of income filed with the Revenue and claimed to be offered for taxation voluntarily by the assessee in ROI filed with Revenue. We are of the considered view that the same income cannot be taxed twice, but aforesaid contentions of the assessee certainly need verification by the authorities below . As such, we remit this matter back to the file of the A.O. for verification in the said saving bank account of the assessee with Dena Bank and were already subjected to tax in ROI filed voluntarily by assessee with Revenue. Regarding the other additions as sustained by learned CIT(A) , as agreed and admitted by the ld. counsel for the assessee, we are confirming the said additions in the hands of the assessee. The AO shall grant proper and adequate opportunity of being heard to the assessee in accordance with principles of natural justice in accordance with law. - Decided partly in favour of assessee for statistical purposes.

Summary

Issues:
Addition of deposits as undisclosed income, Delay in filing appeal, Double taxation of income

Analysis:

1. Delay in Filing Appeal:
The appeal was filed late by 17 days due to the ill-health of the assessee. The tribunal decided to condone the delay in the interest of justice, emphasizing that technicalities should not override the pursuit of justice. The decision was made after considering the explanation provided by the assessee and the absence of any malafide intent.

2. Addition of Deposits as Undisclosed Income:
The main issue in this case revolved around the addition of deposits amounting to ?22 lakhs in the assessee's personal saving bank account with Dena Bank. The Assessing Officer (AO) treated this amount as undisclosed income due to the lack of documentary evidence regarding the source of the deposit. The Commissioner of Income Tax (Appeals) partially upheld this addition, confirming ?17,18,391 as undisclosed income. The tribunal noted that the Revenue did not appeal against the relief granted by the CIT(A) on certain credits, including salary income, commission income, and interest income, which were voluntarily declared in the return of income filed with the Revenue. The tribunal remitted the matter back to the AO for verification of these credits to ensure that the same income was not taxed twice, emphasizing the fundamental principle of avoiding double taxation.

3. Double Taxation of Income:
The tribunal acknowledged the need for verification of the credits related to salary income, commission income, and interest income in the saving bank account of the assessee. If these incomes were already taxed in the return of income filed with the Revenue, the assessee should be entitled to relief to prevent double taxation. The tribunal confirmed other additions as sustained by the CIT(A) based on the agreement and admission of the assessee's counsel. The AO was instructed to provide the assessee with proper opportunities to be heard in accordance with principles of natural justice.

In conclusion, the appeal of the assessee was partly allowed for statistical purposes, with the tribunal emphasizing the importance of verifying income sources to prevent double taxation and ensuring fair treatment in tax assessments.