2015 (6) TMI 799 - AT - Income Tax

Tribunal remits appeals for additional verification of bank accounts and evidence

Shri Sama Srinivas Reddy and others Versus Income Tax Officer Ward 9 (1) Hyderabad

The Tribunal remitted the appeals back to the AO for further verification of bank accounts and evidence provided by the assessees regarding unexplained ... Unexplained deposits in bank account - ex-parte order u/s 144 - Held that:- Since the AO has verified only one account namely ICICI Bank and has passed the assessment order u/s 144 as ex-parte order and also that the assessee has informed about the Vijaya Bank a/c only before the CIT (A), we are of the opinion that the matter should be remitted back to the file of the AO to verify the bank accounts. Since the assessee has provided copy of the bank statements with ICICI Bank and Vijaya Bank and in form No.26AS for the A.Y 2009-10 in the paper book. AO shall verify the same and decide the issue in accordance with law. - Decided in favour of assessee for statistical purposes. Issues Involved:1. Delay in filing the appeal.2. Unexplained cash deposits and their treatment as income.3. Verification of additional evidence and remand reports.4. Reconciliation of discrepancies between original and revised income computations.5. Treatment of rental and agricultural income.Detailed Analysis:1. Delay in Filing the Appeal:In both appeals (ITA No.1312/Hyd/2014 and ITA No.1313/Hyd/2014), there was a delay of 126 days in filing the appeal before the ITAT. The petitioners attributed the delay to the lack of communication from their previous advocate and subsequent procedural delays in changing counsel and preparing the appeal papers. The Tribunal found the reasons for the delay to be genuine and condoned the delay.2. Unexplained Cash Deposits and Their Treatment as Income:For ITA No.1312/Hyd/2014, the assessee had deposited Rs. 25,73,902 in cash into an Andhra Bank account. The AO treated these deposits as unexplained income due to the absence of detailed explanations. Similarly, in ITA No.1313/Hyd/2014, the assessee had deposited Rs. 37,79,001 in cash into an ICICI Bank account, which the AO also treated as unexplained income. The assessees argued that these amounts were cash on hand from various sources, including business receipts, rents, and agricultural income.3. Verification of Additional Evidence and Remand Reports:The CIT (A) in both cases referred the matter back to the AO for verification of additional evidence provided by the assessees. The AO's remand reports indicated discrepancies and insufficient evidence to explain the cash deposits. For instance, in ITA No.1312/Hyd/2014, the AO noted that the gross receipts from the business were understated in the original return compared to the revised computation. Similarly, in ITA No.1313/Hyd/2014, the AO found discrepancies in the gross receipts and noted additional unexplained credits in a Vijaya Bank account.4. Reconciliation of Discrepancies Between Original and Revised Income Computations:In ITA No.1312/Hyd/2014, the AO observed that the gross receipts from the tent house business were increased in the revised computation, and rental receipts were understated in the original return. The CIT (A) confirmed additions based on these discrepancies. Similarly, in ITA No.1313/Hyd/2014, the AO found that the gross receipts were inflated in the revised computation, and the CIT (A) confirmed additions based on the differences between the original and revised figures.5. Treatment of Rental and Agricultural Income:In both cases, the assessees claimed rental and agricultural income as part of their explanations for the cash deposits. However, the AO found insufficient evidence to substantiate these claims. For instance, in ITA No.1312/Hyd/2014, the AO noted that rental receipts were not deposited into the Andhra Bank account, and agricultural income was not adequately supported by evidence. In ITA No.1313/Hyd/2014, the AO found discrepancies in the reported agricultural lands and rental receipts.Conclusion:In both appeals, the Tribunal decided to remit the matters back to the AO for further verification of the bank accounts and other evidence provided by the assessees. The AO was directed to verify the bank statements and other relevant documents and decide the issues in accordance with the law. The appeals were allowed for statistical purposes, with instructions for the AO to conduct a thorough verification process.Order Pronouncement:The order was pronounced in the Open Court on 17th June, 2015.