Tribunal allows appeals, cash deposits not linked to assessee, used for business purposes by another.

The tribunal allowed both appeals filed by Samir N. Mehta and Akshay A. Sawant, as it found proper verification of cash deposits by the Assessing Officers and concluded that the cash did not pertain to the assessee but was used for business purposes by another individual. The tribunal set aside the orders under section 263 of the Income-tax Act, 1961, affirming the original assessment orders in both cases, emphasizing the similarity in facts and circumstances.

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Issues: Time-barred appeals, CIT's order under section 263 of the Income-tax Act, 1961, assessment year 2009-10, proper verification of cash deposits, common issue in two appeals.

Analysis:
1. Time-barred Appeals - Samir N. Mehta:
- The appeal in this case was time-barred by 789 days, but the assessee provided reasons for the delay in an affidavit, which the tribunal found satisfactory. The delay was condoned, and the appeal was admitted for hearing on merits.

2. CIT's Order under Section 263 - Samir N. Mehta:
- The appeal was against the CIT's order under section 263 of the Income-tax Act, 1961, for the assessment year 2009-10. The CIT set aside the assessment order passed by the AO, citing lack of proper inquiry into cash deposits made by the assessee. The AO had determined the total income with a small addition after scrutiny based on cash deposits in the bank account.

3. Proper Verification of Cash Deposits - Samir N. Mehta:
- The CIT noted that the AO did not adequately verify the cash deposits of Rs. 23,60,000 made by the assessee. However, upon examination, it was found that the cash deposits were made by Mr. Dilip Talekar, partner of Shri Laxmisen Agencies, for purchasing demand drafts for Wockhardt Limited. The AO conducted inquiries and verified the transactions, concluding that Mr. Talekar used the assessee's account for business purposes, leading to a correct determination that the cash did not pertain to the assessee.

4. Common Issue in Two Appeals - Samir N. Mehta & Akshay A. Sawant:
- Both appeals involved salaried employees working with Wockhardt Limited, where Mr. Dilip Talekar used their bank accounts for purchases outside the books of account for Shri Laxmisen Agencies. The AOs in both cases conducted proper investigations during the original assessment proceedings, finding no discrepancies. The CIT set aside the assessment orders for both cases, directing a de novo determination. The tribunal found the facts and circumstances similar to the first case, thus allowing both appeals.

5. Conclusion:
- The tribunal allowed both appeals, emphasizing the proper verification conducted by the AOs and the correct conclusions drawn regarding the source of cash deposits. The orders under section 263 were set aside, affirming the original assessment orders.

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