2023 (3) TMI 913 - AT - Income Tax

Addition on account of salary income - AO noted that the assessee has received a sum as compensation on resignation from the company and the same was not disclosed in the return of income - Also Amount received from company was on behalf of the mother-in-law cannot be accepted as the company have directly refunded the amount to assessee s mother-in-law to her bank account and there is no requirement to give the same to the assessee - HELD THAT - This income has been explained by assessee and even otherwise it is not clear from the assessment order that how the AO is making addition because the salary income narrated by AO in his order is deleted by CIT(A) because the assessee has already declared this amount under the head salary. Hence, delete the addition and allow this issue of assessee s appeal. Unexplained investment - HELD THAT - Even from the fund position as noted by the AO there is withdrawal from father s bank account maintained at SBI, Vadavalli, an amount of Rs.2,40,000/- and withdrawal of Rs.7,00,000/- on 05.03.2012, total comes to Rs.9,40,000/- whereas investment is only Rs.9,39,320/-. It means that the investment and withdrawal matches. Allow this issue in favour of assessee. Unexplained cash credit u/s 68 - HELD THAT - As assessee could not produce any evidence as was the situation before AO, as was the situation before CIT(A). In absence of any documentary evidence or explanation, confirm the addition. Unexplained cash deposits - assessee filed confirmation from the depositor and lady, who claimed to have been the cousin of the assessee - HELD THAT - CIT(A) noted that she was a school teacher earning Rs.23,000/- per month and hence, he has not accepted the cash deposit of Rs.59,000/- received from her. Even now before us assessee could not file any evidence or explanation to explain this credit entry - dismiss this ground.

Issues:
1. Condonation of delay in filing appeals by the assessee.
2. Addition of Rs.64,250/- on account of salary income.
3. Addition of Rs.2,43,170/- relating to unexplained property investments.
4. Addition of Rs.7,35,000/- as unexplained cash credit.
5. Upholding the addition of Rs.59,000/- deposited by a third party.

Issue 1: Condonation of Delay:
The assessee's appeals were time-barred by 50 days, but a condonation petition was filed citing reasons for the delay. The delay was attributed to misplaced orders, preparation and signing of appeal petition, and subsequent submission. The Tribunal, considering the reasons provided, condoned the delay and admitted the appeals.

Issue 2: Addition of Rs.64,250/- on Salary Income:
The AO made an addition of Rs.64,250/- as salary income, which was contested by the assessee before the CIT(A). While the CIT(A) deleted the addition of Rs.11,00,000/-, he sustained the addition of Rs.64,000/- stating that the explanation provided by the assessee was not acceptable. However, the Tribunal, after reviewing the facts and explanations, found that the addition was not justified and ruled in favor of the assessee.

Issue 3: Addition of Rs.2,43,170/- on Unexplained Property Investments:
The AO added Rs.3,69,450/- as unexplained property investments, which was reduced by the CIT(A) to Rs.2,43,170/- based on insufficient cash withdrawals evidence. The Tribunal, upon examination, found that the investment and withdrawals matched, leading to the deletion of the addition in favor of the assessee.

Issue 4: Addition of Rs.7,35,000/- as Unexplained Cash Credit:
The AO added Rs.7,35,000/- as unexplained cash credit under section 68 of the Act, which was confirmed by the CIT(A) due to lack of substantial cash withdrawals before the deposits. The Tribunal, noting the absence of evidence or explanation from the assessee, upheld the addition, resulting in the dismissal of this issue.

Issue 5: Addition of Rs.59,000/- Deposited by a Third Party:
The AO made an addition of Rs.15,49,000/- as unexplained cash deposit, which was reduced by the CIT(A) to Rs.59,000/- allegedly received from a third party. The Tribunal, after considering the facts and lack of evidence provided by the assessee, dismissed the appeal related to this addition.

In conclusion, the Tribunal partly allowed one appeal and dismissed another, addressing various issues related to additions made by the AO and upheld by the CIT(A) concerning salary income, property investments, unexplained cash credit, and third-party deposits. The Tribunal's decisions were based on a thorough review of facts, explanations, and legal provisions, resulting in the final judgment pronounced on 8th March 2023 in Chennai.

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