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2024 (1) TMI 945 - ITAT KOLKATACondonation of delay - appeal is time barred by 266 days - HELD THAT:- As delay has not been adopted by the assessee as a strategy to litigate with the Revenue because by making the appeal time-barred, he will not gain anything. The assessment order and ld. CIT(Appeals)’s order are required to be challenged otherwise he cannot be absolved from the tax liability. It appears there is some bonafide mistake for not appearing before the lower authorities and filing the appeal well in time. Apart from the above, we are going to comment on the merits and how ld. Assessing Officer has framed the assessment order. Thus in our opinion, the delay in filing the appeal deserves to be condoned. We accordingly condone the delay and proceed to decide the appeal on merit. Best Judgment assessment - debit balance from a Bank account added to the income of the assessee - AO has verified this expenses in comparison to the turnover shown by the assessee under section 44AD. This exercise has been made by the AO while passing a best judgment assessment order. We failed to appreciate under which law a debit balance from a Bank account could be added to the income of the assessee. The available balance was not treated as an unexplained balance in the Bank account. It might be flowing from the earlier years, out of that the assessee had made the payments. AO was unable to lay his hands on any of the details that such payments were not in connection with the business of the assessee. He simply considered the total withdrawal from the Bank, vis-à-vis the turnover of the assessee and then held that debit balance from the Bank is to be treated as unexplained income of the assessee under section 69C. In our view, it is just an absurd conclusion without any cross verification and without collecting any information. It is further found that the ld. 1st Appellate Authority has also again not appreciated any of these circumstances but dismissed the appeal for want of prosecution. No doubt in a best judgment, element of assumption will always be invoked, but that estimation could not be yield one and it cannot be used as a tool to punish the assessee. AO is supposed to collect information from the surroundings of the assessee and thereafter formed a reasonable belief that the available income required to be assessed from the assessee. Due to this simple reason, we have reproduced the complete assessment order. Therefore, in our opinion, the addition is not sustainable. In the second item, AO observed that cash in hand shown at Rs. 24,00,490/- but on perusal of the ITR, the abovementioned cash in hand was not shown. According to the ld. Counsel for the assessee, this is again an incorrect assumption at the end of the assessee. The cash in hand in the books is only Rs. 4,000/-, rest is available in the accounts and it cannot be construed as cash in hand. Appeal of the assessee is allowed.
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