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2014 (7) TMI 954 - AT - Income TaxUnexplained expenditures - additions u/s 69C - unproved liabilities books maintained on mercantile basis - Admission of additional ground Addition made on cash found at premises Held that:- It has nowhere explained the basis of the payment in such an odd sum, much below the amount that was required to be paid as per the agreement itself - the assessee could rightly claim the expenditure qua payment for the current year, there is no basis for booking expenditure on the basis of accrual, and which has thus been claimed in excess - there is further no question of liability ceasing during the current year in-as-much as no liability in its respect had accrued in the first place - the disallowance/addition in respect of the unproved expense/liability for ₹ 17.50 lacs outstanding in the name of Ab as on 31.03.2001 is confirmed - where the assessee accepts the assessment of this income for the current year, he shall, on moving the Revenue, be allowed, upon verification, consequential relief for A.Y. 2004-05 - even in the case of non-acceptance by the assessee, the Revenue cannot, impending the resolution of the dispute, collect tax twice, so that the demand for one year shall have to be kept in abeyance. AB may have never agreed for being paid any compensation for the Asthma campaign for which his pictures were being sought - there is as such no basis to hold that a liability to AB had ever accrued during the year, and ceased to do so at a later point in time - There is no merit in the charge of the income having been subject to tax on cash basis who admittedly was not paid any amount - the payment having been made, source of which is unexplained - the addition u/s 69C would also arise - The argument, though valid, would yet give rise to a single adjustment and not two in-as-much as there has been a single payment against a single liability - the liability is reflected in the accounts, its stands discharged prior to March, 2001, so that the source of payment remained unexplained - irrespective of the response from RM, there shall arise only a single adjustment to the assessee's returned income on account of liability toward and payment to RM, for the current year Decided against Assessee.
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