Partial success for assessee in ITAT appeal on unexplained money under Income Tax Act

The ITAT Chennai partially allowed the appeal of the assessee. The addition of Rs.5.00 lakhs as unexplained money under section 69A of the Income Tax Act was accepted for the jewel loan proceeds but deemed explained for the sale of the car. The judgment was pronounced on 10th March 2023.

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Issues:
The judgment involves the condonation of delay in filing the appeal and the addition of Rs.5.00 lakhs as unexplained money under section 69A of the Income Tax Act.

Delay Condonation:
The appeal was delayed by 16 days, which was attributed to the assessee discovering the order belatedly on the income-tax e-filing portal. The delay was deemed unintentional, and after perusing the affidavit for condonation of delay, the delay was condoned, and the appeal was admitted for adjudication.

Unexplained Money Addition:
The sole issue in the appeal was the CIT(A)'s decision to uphold the addition of Rs.5.00 lakhs as unexplained money under section 69A of the Act. The amount in question arose from the sale of a car and repayment of a loan.

Factual Background:
The assessee purchased a car with a loan amount and subsequently sold it to another individual due to financial constraints. The Assessing Officer made the addition of Rs.5.00 lakhs as unexplained money, which was challenged by the assessee in the appeal before the CIT(A).

Judgment:
The ITAT Chennai, after considering the facts and evidence presented, found that the sale and purchase of the car were legitimate. The registration certificate and invoice supported the assessee's claims, and the payment made by the buyer was used to settle the outstanding loan. Therefore, the ITAT accepted the explanation provided by the assessee regarding the Rs.4.50 lakhs and deemed it explained.

Decision on Jewel Loan Proceeds:
Regarding the proceeds of a jewel loan by the assessee's wife, the ITAT partially allowed the appeal. While the explanation provided by the assessee was accepted in part, the addition was confirmed to the extent where sufficient evidence was lacking.

Conclusion:
In conclusion, the appeal of the assessee was partly allowed, with the ITAT accepting the explanation for the sale of the car but confirming the addition related to the jewel loan proceeds. The judgment was pronounced on 10th March 2023.

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