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2009 (6) TMI 658 - ITAT AGRATaxability of income - Accrual or payment basis - Held that: - AO cannot resort to double taxation if he finds that the assessee had disclosed the income to this extent in the subsequent year. The income, if any, included in the subsequent year, may be excluded. Expenses on purchase of property - AO inferred that such expenditure had been incurred by the assessee out of his unexplained sources and added the same to the income of the appellant. - Held that: - AO cannot brush aside the assertion of the appellant without bringing any material on record. The AO had not made any enquiry from Smt. Madhu Sood, the seller of the property. In absence of any material brought on record, the AO was not justified in making addition. Surrender of income - Held that:- surrender alone as such cannot be the basis of making the addition and even the AO has not proceeded on that basis and made addition only of the amount which was not explained and (sic-not) the surrender to the extent explained to be from withdrawals from bank for purchase of drafts. - When a part of the surrender can be accepted on proper explanation the rest can also be allowed to be explained. - The assessee's claim that balance was from cash withdrawals from cash book has to be tested on the facts appearing in the case. - AO directed to verify if the amount of Rs. 12,33,799 invested in purchase of draft was withdrawn from the regular cash book after verification of entries of cash withdrawals. In the peculiar facts of the case it would first be necessary to establish availability of funds in the cash book.
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