Appeal partly allowed by ITAT; delay condoned for illness. Unexplained deposit deleted, funds transfer addition removed. Expense disallowance upheld.

The appeal was partly allowed by the ITAT. The delay in filing the appeal was condoned due to the assessee's illness. The addition of an unexplained deposit in the ICICI Bank account was deleted as the assessee provided evidence of cash receipts. The addition of funds transferred through demand drafts was also deleted as the ITAT found the assessee had sufficient balance. However, the disallowance of expenses due to lack of supporting documentation was upheld.

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Issues Involved:
1. Condonation of delay in filing the appeal.
2. Addition of unexplained deposit in ICICI Bank account.
3. Addition of funds transferred through demand drafts.
4. Disallowance of expenses due to lack of supporting bills and vouchers.

Condonation of Delay in Filing the Appeal:
The appeal was filed 13 days beyond the stipulated time period, with the assessee citing illness as the reason for the delay. The ITAT, after considering the reasons stated in the petition, agreed that the assessee had a sufficient cause for the delay. Citing a judgment by the Hon'ble Allahabad High Court, the delay was condoned, and the appeal was admitted for hearing.

Addition of Unexplained Deposit in ICICI Bank Account:
The appeal contested the addition of Rs. 4,00,000 as an unexplained deposit in an ICICI Bank account. The assessee argued that the cash receipts and opening balance in hand were sufficient to account for the deposit. The ITAT reviewed the ledger account and cash book, concluding that the assessee had proven the cash deposit, leading to the deletion of the addition.

Addition of Funds Transferred Through Demand Drafts:
The AO had added Rs. 4,50,000 under section 69 of the Act, alleging that the assessee made drafts from undisclosed bank accounts without sufficient cash. However, the ITAT found that the drafts were made by staff members directly depositing cash in banks due to urgency. Upon reviewing the cash book and ledger accounts, the ITAT determined that the assessee had enough balance to purchase the drafts, leading to the deletion of the addition.

Disallowance of Expenses Due to Lack of Supporting Bills and Vouchers:
The AO had made estimated disallowances for expenses due to the absence of supporting bills and vouchers, a decision upheld by the CIT(A). The ITAT noted that the assessee failed to provide satisfactory explanations or evidence for the missing documents. Consequently, the ITAT agreed with the lower authorities' decision to estimate the disallowance, resulting in the dismissal of Ground Nos. 4 to 11.

In conclusion, the appeal was partly allowed, with the ITAT ruling in favor of the assessee regarding the unexplained deposit and funds transferred through demand drafts while upholding the disallowance of expenses due to lack of supporting documentation.

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