Tribunal upholds rental income addition, dismisses appeal on unexplained deposits.

The Tribunal upheld the addition of rental income and removal of deficiency in granting statutory deduction. The Commissioner (Appeals) partly deleted the addition related to unexplained deposits but upheld the addition of rental income, directing to allow statutory deduction and TDS credit. The Tribunal found the decision of the Commissioner (Appeals) to be based on facts and material before him, as the assessee failed to establish the source of deposits. The appeal was ultimately dismissed by the Tribunal.

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Issues:
Challenge to addition under section 68 of the Income Tax Act, 1961.

Analysis:
The appeal was filed against the order of the Commissioner of Income Tax for the assessment year 2010-11. The assessee did not appear for the hearing despite multiple opportunities and lack of interest. The primary issue was the addition of Rs.9,53,000 under section 68 of the Income Tax Act. The Assessing Officer reopened the assessment due to information about rental income of Rs.6,45,000 received by the assessee. The AO proceeded with the assessment to the best of his judgment as the assessee did not fully comply with the notices. Various deposits in the bank account were found, and rental income was not offered for taxation. The AO made an addition of Rs.23,48,000 as income of the assessee. The Commissioner (Appeals) partly deleted the addition related to unexplained deposits but upheld the addition of rental income, directing to allow statutory deduction and TDS credit. The Tribunal found the decision of the Commissioner (Appeals) to be based on facts and material before him, as the assessee failed to establish the source of deposits. The Tribunal upheld the addition of rental income and removal of deficiency in granting statutory deduction.

The Tribunal noted that the assessee did not comply with queries raised by the AO and failed to provide supporting evidence for deposits. The assessee submitted some evidence before the Commissioner (Appeals) to explain the deposits partially. The Tribunal found no reason to interfere with the decision of the Commissioner (Appeals) as the assessee did not provide additional evidence to establish the source of deposits. The Tribunal upheld the addition of rental income as the assessee had received rental income but did not offer it for taxation. The deficiency in granting statutory deduction was rectified by the Commissioner (Appeals). The Tribunal dismissed the allegation of violation of natural justice by the Commissioner (Appeals) as the assessee was given a full opportunity to present its case, and all evidence was considered before making the decision. The appeal was ultimately dismissed by the Tribunal.

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