ITAT modifies undisclosed income treatment, dismisses challenge to addition under section 234B. Precedents on precluding later challenges noted.

The ITAT partially allowed the appeal, directing 50% of the cash deposited to be treated as undisclosed income, modifying the lower authority's decision. The appellant's challenge to the addition of concealed income and interest under section 234B was dismissed, as agreeing to an addition before the Assessing Officer precluded later challenges without proof of coercion or threat, per precedents. The judgment was delivered on 17/09/2018.

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Issues:
Challenge to addition of concealed income in bank account and interest levied under section 234B of the Income Tax Act.

Detailed Analysis:
1. The appellant challenged the addition of Rs. 5,49,900 in the bank account as concealed income, disputing the observation that the appellant had agreed to the addition. The appellant also contested the interest imposed under section 234B. The case originated from the assessment for the year 2013-14, where the appellant declared total income of Rs. 3,56,490. However, scrutiny revealed substantial cash deposits in the bank account, with a peak amount of Rs. 5,49,900. The appellant later offered this amount for taxation as unexplained income. The Assessing Officer added this amount to the total income, leading to the appeal before the Commissioner of Income Tax (Appeals) and subsequently to the ITAT.

2. The appellant's representative argued that the deposits made by the appellant were Rs. 7,02,700 with withdrawals of Rs. 3,07,600. Referring to a previous assessment year, it was contended that the peak credit of Rs. 5,49,900 should be treated as explained income from the addition made in the earlier year. The department's representative relied on the lower authorities' orders.

3. The ITAT considered the contentions of both parties and reviewed the relevant facts and materials. The Commissioner of Income Tax (Appeals) had dismissed the appeal, citing precedents where an appellant agreeing to an addition before the Assessing Officer cannot challenge it later unless coercion or threat is proven. Since no such coercion was evident in this case, the appeal was dismissed. The appellant cited a judgment from a Coordinate Bench in a previous year's case, where 50% of cash deposits were treated as undisclosed income. Following this precedent, the ITAT directed the Assessing Officer to treat 50% of the cash deposited as undisclosed income in the present case.

4. Consequently, the ITAT partially allowed the appeal of the assessee, modifying the Commissioner of Income Tax (Appeals) order and directing the treatment of 50% of the cash deposited as undisclosed income. The judgment was pronounced in open court on 17/09/2018.

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