ITAT Chennai Judgments — October 2026

The Tribunal held that the AO failed to establish the factual foundation for the alleged purchases and the statutory foundation for treating the entire purchase value as unexplained money under Section 69A. The Tribunal noted that the assessee denied the purchases, provided its purchase register, financial statements, and bank statements, and stated it had no dealings with LRIPL or its associates. The name in the IVMS database was materially different. The AO's reliance on the IVMS data, without independent corroboration, consignment notes, transport records, or delivery documents, was insufficient. The Tribunal found that the AO did not demonstrate that the investigation into LRIPL resulted in independent evidence proving the alleged purchases by the assessee. Similarly, low returned income in other years does not establish a specific purchase transaction. The Tribunal clarified that Section 69A applies to money, bullion, jewellery, or other valuable articles found with the assessee and not recorded in books, where the nature and source are unexplained. The addition made represented alleged purchase value, not unexplained money or assets owned by the assessee outside its books. The conditions for invoking Section 69A were not demonstrated. Therefore, the addition of Rs. 34,13,862/- made under Section 69A was deleted. The Tribunal refrained from deciding the legal issues regarding reassessment proceedings as the addition failed on merits.