2019 (6) TMI 1178 - AT - Income Tax

Condonation of delay - delay of 171 days - appeal has been disposed off by the CIT(A) on 08.01.2016 and assessee expired on 16.05.2016 - legal heir who filed this appeal before this Tribunal was looking after his father s health during his hospitalization caused delay in filing the present appeal - HELD THAT - On hearing both the parties and having verified above said affidavit, we find the reasons stated in the said affidavit are bonafide which really prevented the assessee in filing the present appeal in time. Therefore, the delay of 171 days are condoned. Addition on account of undisclosed cash deposit - search and seizure operation conducted at office premises of the assessee wherein documents, books of accounts, computers, cash, jewelleries, bank accounts etc. were found and some of the documents were seized - HELD THAT - The assessee has declared undisclosed income for AY 2009-10 is ₹ 7,91,88,956/- which is inclusive of the other receivables as discussed above to an extent of ₹ 2,89,01,000/-. Therefore, it is clear that the AO considered the other receivable as discussed above in the AY 2009-10 and it is very much part of total income of the assessee under the head undisclosed income . There is no dispute in respect of this aspect and also the payment of tax by the assessee. Further, an amount of ₹ 1,86,49,244/- as considered as income of the assessee vide revised return for ay 2010-11. In our opinion, the impugned amount is much less than the undisclosed income assessed during the two assessment years i.e. 2009-10 2-10-11 in the hands of the assessee and no separate additions on account of unexplained cash deposits requires to be made in the year under consideration. Therefore, we find force in the arguments of the Ld.AR that telescoping of the impugned amount should be telescoped with the total income computed for AYs 2009-10 2010-11. Thus, in view of the above observations, no separate addition is maintainable and the addition made by the AO and confirmed by the CIT(A) is deleted - Decided in favour of assessee.

Summary

Issues:
Delay in filing appeal condonation, Addition on account of undisclosed cash deposit

Delay in filing appeal condonation:
The appeal was filed with a delay of 171 days due to the demise of the assessee. The legal heir explained that the delay was caused because the assessee was unwell and hospitalized before passing away. The Tribunal, after verifying the affidavit, condoned the delay as the reasons stated were found to be genuine and prevented the timely filing of the appeal.

Addition on account of undisclosed cash deposit:
The main issue was whether the CIT(A) was justified in confirming the addition made by the AO on account of undisclosed cash deposit. The AO added the amount as undisclosed cash deposit after finding discrepancies in the details provided by the assessee regarding trade receivables. The CIT(A) confirmed the addition based on the Remand Report, which stated that the assessee failed to substantiate the claim and provide necessary details to prove that the cash deposits were made from trade receivables. The CIT(A) rejected the appeal on this ground.

Detailed Analysis:
The assessee, engaged in the production of TV serials, was subject to a search and seizure operation where undisclosed cash deposits were found. The AO added the amount to the total income of the assessee, considering it as undisclosed cash deposit out of undisclosed income. The CIT(A) sought a Remand Report, which highlighted the failure of the assessee to provide supporting details to prove the source of cash deposits. Despite multiple hearings, the assessee and the authorized representative failed to explain the matter adequately, leading to the confirmation of the addition.

However, the Ld.AR argued that the undisclosed income had already been taxed in previous assessment years and prayed for telescoping the impugned amount with the income assessed in those years. The Tribunal noted that the impugned amount was part of the undisclosed income assessed in previous years and no separate addition was required. Therefore, the addition made by the AO and confirmed by the CIT(A) was deleted, and the appeal of the assessee was allowed.

In conclusion, the Tribunal found merit in the argument for telescoping the impugned amount with the total income computed for previous assessment years, leading to the deletion of the addition on account of undisclosed cash deposit. The order of the CIT(A) was set aside, and the appeal of the assessee was allowed.