Additional evidence and revised claims can be admitted where bank deposits require factual verification before treating them as unexplained income.

A short delay in filing the ITAT appeal was accepted as bona fide and condoned on the basis of a plausible affidavit-supported explanation. The Tribunal also admitted additional evidence and a revised computation, noting that appellate authorities are not barred from considering a revised claim merely because no revised return was filed. Because the dispute over bank deposits, turnover and business receipts depended on factual verification, the matter was remanded to the Assessing Officer for fresh examination after giving the assessee adequate opportunity. The approach emphasised that bank deposits linked to business activity should be verified on surrounding facts and peak basis rather than treated mechanically as unexplained income.

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Issues: (i) Whether the delay of 5 days in filing the appeal before the Tribunal deserved condonation. (ii) Whether the assessee's additional evidence and revised computation of income were admissible and whether the matter required remand for fresh verification in relation to additions made on account of bank deposits treated as unexplained income.

Issue (i): Whether the delay of 5 days in filing the appeal before the Tribunal deserved condonation.

Analysis: The delay was explained as short, unintentional and supported by an affidavit. The explanation was accepted as bona fide and not mala fide.

Conclusion: The delay was condoned in favour of the assessee.

Issue (ii): Whether the assessee's additional evidence and revised computation of income were admissible and whether the matter required remand for fresh verification in relation to additions made on account of bank deposits treated as unexplained income.

Analysis: The assessee had sought admission of additional evidence before the first appellate authority and the material had been forwarded to the Assessing Officer for remand. The Tribunal held that the first appellate authority rejected the material on technical grounds without properly examining its relevance. It further noted that appellate authorities are not barred from entertaining revised claims merely because no revised return was filed, and that the controversy over bank deposits, turnover and business receipts required factual verification. Reliance was placed on the principle that where bank transactions are intertwined with business receipts, the correct approach is to examine the peak and the surrounding facts rather than mechanically treat the entire deposits as income.

Conclusion: The additional evidence and revised computation were admitted, and the matter was remanded to the Assessing Officer for fresh consideration after granting adequate opportunity to the assessee.

Final Conclusion: The appeal succeeded to the extent of procedural and substantive reconsideration, and the additions were not finally sustained at this stage.

Ratio Decidendi: Appellate authorities may admit relevant additional evidence and entertain revised claims, and where bank deposits are alleged to represent business receipts, the matter should be verified afresh rather than deciding the entire deposits as unexplained income mechanically.

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