Tribunal Allows Appeal on Unaccounted Income, Justifies Delay

The Tribunal condoned the delay in filing the appeal due to reasonable reasons not attributable to the assessee. Despite lack of concrete evidence, unexplained cash deposits in the bank account were treated as unaccounted income, with a portion added to the assessment. The Tribunal considered the cash deposits as representing undisclosed turnover of the firm and attributed a specific amount as unaccounted income. The delay in pronouncing the order was justified by the Tribunal due to the Covid-19 lockdown situation, and the appeal was partly allowed based on the circumstances and evidence presented.

---

---

Issues:
Delay in filing appeal before the Tribunal, Addition of unexplained cash deposits in bank account, Lack of proper books of accounts and evidence, Source of bank deposits, Treatment of cash deposits as unaccounted income, Consideration of lockdown due to Covid-19 pandemic.

Delay in filing appeal before the Tribunal:
The appeal was filed with a delay of 544 days, and the assessee sought condonation of delay due to misplacement of the order by an employee of the Chartered Accountant. The Tribunal, after perusing the explanation and affidavit provided, found the reasons for delay reasonable and not attributable to the assessee. Consequently, the Tribunal condoned the delay in the filing of the appeal in the interest of justice.

Addition of unexplained cash deposits in bank account:
The assessee, a resident individual running a wine shop, deposited a significant amount in the bank account, which was not disclosed in the income tax return. The assessing officer (AO) treated this amount as unexplained credit, leading to an addition of the same in the assessment. The CIT (A) upheld this decision due to the lack of proper books of accounts and evidence provided by the assessee to prove the source of the bank deposits. The Tribunal noted that neither the assessee nor the firm maintained proper books of accounts, and the bank account was not reconciled with the business operations. Despite the lack of concrete evidence, the Tribunal presumed the cash deposits to be from the firm's sale proceeds but sustained an addition as unaccounted income to meet the ends of justice.

Treatment of cash deposits as unaccounted income:
While acknowledging the lack of substantial evidence, the Tribunal considered the cash deposits as representing the undisclosed turnover of the firm. It noted the Revenue's failure to obtain statements from the bank regarding the transactions, indicating laxity. The Tribunal decided to treat a portion of the cash deposits as unaccounted income earned by the assessee, sustaining an addition of &8377; 2,18,000 as unaccounted income, rather than the entire amount.

Consideration of lockdown due to Covid-19 pandemic:
The Tribunal mentioned the delay in pronouncing the order, attributing it to the extraordinary situation of the lockdown during the Covid-19 pandemic. The Tribunal justified the delay by referring to a decision of the Mumbai Bench of the Tribunal and pronounced the order after 90 days of hearing. The appeal was partly allowed, considering the circumstances and evidence presented during the proceedings.

---