ITAT partially allows appeal, reduces unexplained income addition, remands for further review. Accepted army personnel's explanation on cash transactions.

The ITAT partially allowed the appeal, deleting Rs.2,18,100 from the total addition of unexplained income and remanding the remaining issue to the AO for further consideration. The ITAT accepted the explanation provided by the army personnel appellant for certain cash transactions, directing verification of the revised cash flow statement. The jurisdiction issue was dismissed as not pressed, and the delay in filing the appeal was condoned due to pandemic-related reasons.

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Issues Involved:
1. Jurisdiction and transfer of case records.
2. Sustaining addition of Rs.15,41,749/- as unexplained income.
3. Condonation of delay in filing the appeal.

Detailed Analysis:

1. Jurisdiction and Transfer of Case Records:
The appellant initially raised the issue that the order of the CIT(A) was without jurisdiction and did not consider the request to transfer the case records to the Jaipur office. However, during the hearing, the appellant did not press this ground. Consequently, this issue was dismissed as not pressed.

2. Sustaining Addition of Rs.15,41,749/- as Unexplained Income:
The primary issue in this appeal was the addition of Rs.15,41,749/- out of a total of Rs.20,41,749/- made by the AO on account of alleged unexplained income from cash deposits in the assessee's bank accounts.

Facts and Proceedings:
- The assessee, an army personnel, filed a return of income for the A.Y. 2009-10 declaring a net taxable income of Rs.8,68,646/-, later revised to Rs.7,78,370/-.
- The case was selected for scrutiny due to cash deposits of Rs.15,32,350/- in Axis Bank and Rs.5,09,399/- in ICICI Bank, which the assessee failed to explain satisfactorily.
- The AO added Rs.20,41,749/- as unexplained money due to the lack of correlation between withdrawals and deposits and the absence of substantive evidence.

First Appeal:
- The CIT(A) confirmed the addition of Rs.15,41,749/- while accepting the explanation for Rs.5,00,000/-.
- The CIT(A) found discrepancies in the explanations provided by the assessee during assessment and appellate proceedings, particularly regarding the amounts claimed to be received from relatives and cash withdrawals from bank accounts.

ITAT's Observations:
- The assessee's revised cash flow statement and affidavit were considered.
- The ITAT noted that the assessee, being an army personnel, had genuine difficulties in obtaining confirmations from friends and relatives for Rs.2,18,100/- received against earlier advances.
- The ITAT accepted the affidavit and the revised cash flow statement, directing the AO to verify the transactions and accept the opening cash balance of Rs.8,54,803/-.

Conclusion:
- The ITAT allowed the deletion of Rs.2,18,100/- from the total addition and restored the remaining issue to the AO for fresh consideration, directing the assessee to submit relevant documents.

3. Condonation of Delay in Filing the Appeal:
- The appeal was delayed by 453 days, which the assessee attributed to the Covid-19 pandemic and postal delays.
- The ITAT considered the Supreme Court's order extending the limitation period due to the pandemic and found sufficient cause for the delay.
- The application for condonation of delay was allowed, enabling the appeal to be heard on merits.

Conclusion:
The appeal was partly allowed for statistical purposes, with the ITAT directing the AO to verify the revised cash flow statement and pass a fresh order after providing an adequate opportunity to the assessee. The issue of jurisdiction was dismissed as not pressed, and the delay in filing the appeal was condoned.

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