Interior Decorator’s Rs. 11 Lakh Added as Unexplained Money u/s 69A: ITAT Deletes Addition as Income was Offered to Tax [Read Order]
The assessee had declared the amount received for services in his income tax return, but the Assessing Officer treated it as an accommodation entry.
![Interior Decorator’s Rs. 11 Lakh Added as Unexplained Money u/s 69A: ITAT Deletes Addition as Income was Offered to Tax [Read Order]](https://images.taxscan.in/h-upload/2025/10/03/2093489-unexplained-money-taxscan.webp "Interior Decorator’s Rs. 11 Lakh Added as Unexplained Money u/s 69A: ITAT Deletes Addition as Income was Offered to Tax [Read Order]")
The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the appeal of an interior decorator and deleted the addition of Rs. 11 lakh as unexplained money under section 69A of Income Tax Act,1961,noting that the amount was already offered to tax.
Partha Sarkar,appellant-assessee, filed the income tax return on 3.8.2018, declaring a total income of Rs. 2,98,290. During the year, he received an unsecured loan of Rs. 11,00,000 from M/s. Allium Vintrade Pvt. Ltd. through M/s. Goldensons Trading Pvt. Ltd.
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The case was reopened by the Assessing Officer(AO) through a notice under section 148 of the Act dated 31.3.2022, accompanied by a questionnaire. The AO observed that the Rs. 11,00,000 appeared to be an accommodation entry and sought supporting information. The assessee submitted the original ITR-V, tax computation, bank statements, and the order under section 149(d).
The AO rejected the submissions and added Rs. 11,00,000 as unexplained income under section 147 read with section 144 of the Act. On appeal, the Commissioner of Income Tax (Appeals) [CIT(A)] dismissed the case, noting that no evidence was provided to support the grounds of appeal.
A delay of 68 days occurred in filing the appeal. The assessee filed a condonation petition explaining that the tax advocate had fallen seriously ill and was advised complete bed rest by the doctor, which prevented timely filing. The petition stated that the delay of 65 days was unintentional and that failing to file the appeal would cause both financial and mental hardship.
The tribunal, after considering the explanation, found that there was a reasonable cause for the delay. The delay of 65 days was condoned, and the appeal was admitted for hearing.
The assessee counsel stated at the hearing that the only issue was the CIT(A)’s order, which upheld the addition of Rs. 11,00,000 as unexplained money under section 69A by the AO.
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A single member bench of Rajesh Kumar (Accountant Member) after reviewing the submissions and the orders of the lower authorities, observed that the issue in the appeal was minor and did not require restoration to the AO. It noted that the assessee, an interior decorator, had received the amount for services rendered and had included it in income for tax purposes.
Although the AO treated it as an accommodation entry, the tribunal found that the amount was already offered to tax. Accordingly, the ITAT set aside the CIT(A)’s order and directed the AO to delete the addition.
The appeal of the assessee was allowed.
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