Tribunal allows appeal delay, taxes 12.5% on cash deposits, approves Chapter-VIA deduction

The tribunal condoned the delay in filing the appeal due to a valid reason. Regarding unexplained cash deposits, the tribunal directed the Assessing Officer to tax only 12.5% of the balance turnover as income, considering the nature of the receipts. The tribunal also allowed the deduction claimed under Chapter-VIA, instructing the assessee to provide evidence for verification. The appeal was partly allowed, with directions to estimate income and verify the deduction claimed.

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Issues: Condonation of delay, Treatment of unexplained cash deposits as income, Disallowance of deduction claimed under Chapter-VIA

Condonation of delay:
The appeal was filed with a delay of 45 days, and the assessee submitted a petition for condonation supported by an affidavit. The delay was condoned by the tribunal as there was a sufficient cause for the delay, allowing the appeal to be heard on merits.

Treatment of unexplained cash deposits as income:
The assessee, an individual deriving income from contract works, had unexplained cash deposits in the bank. The Assessing Officer (AO) treated these deposits as unexplained cash deposits under section 68 of the Income Tax Act. The Commissioner of Income Tax (Appeals) partially confirmed the addition, considering only a portion of the deposits as explained turnover. The tribunal, after considering the nature of receipts related to contract works, held that the entire turnover cannot be taxed as income. Citing various case laws, the tribunal directed the AO to estimate income at 12.5% of the balance turnover, allowing the appeal partly.

Disallowance of deduction claimed under Chapter-VIA:
The assessee claimed a deduction of Rs. 1 Lakh under Chapter-VIA, which was disallowed as no evidence was provided. The tribunal directed the assessee to furnish necessary evidence to the AO for verification and allowed the claim as per the provisions of the law, considering this ground allowed for statistical purposes.

In conclusion, the tribunal partly allowed the appeal for statistical purposes, directing the AO to estimate income at 12.5% of the balance turnover and to verify and allow the deduction claimed under Chapter-VIA based on the provided evidence.

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