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2014 (11) TMI 767 - AT - Income TaxDeletion of unexplained expenses – Held that:- The amount withdrawn by the assessee from his bank account cannot be treated as his income merely because the same was not recorded in the books of account – it cannot be treated as unexplained expenditure of the assessee since the source of the amount withdrawn was assessee’s own bank account, as admitted by the AO himself, and there was no dispute about the source of the deposits found to be made in that bank account - revenue has not been able to explain as to how the amount withdrawn by the assessee from his bank account regularly maintained can be treated as income of the assessee and that too as unexplained expenditure u/s 69C of the Act – thus, the order of the CIT(A) is upheld – Decided against revenue. Unexplained credit – Held that:- The amount received form Shri Ajay Agarwal was claimed to be repaid by the assessee as per his instruction to Shri S.Sariah and this claim was duly supported by the confirmation letter issued by Shri Ajay Agarwal - The AO did not accept the explanation offered by the assessee on this issue mainly on the ground that there was no evidence to suggest that Shri S.Saiarah has subsequently paid the amount of ₹ 9,50,000 to Shri Ajay Agarwal - the reason given by the Assessing Officer as well as other reasons given by him to reject the claim of the assessee were totally irrelevant, as the explanation of the assessee of having repaid the amount to Shri S. Sariah on behalf of Shri Ajay Agarwal was duly supported by the confirmation letter issued by Shri Ajay Agarwal himself, wherein he accepted that the payment was made by the assessee to Shri S.Saraiah as per his instructions - it was not a case of any unexplained credit, as alleged by the AO, and the CIT(A) was fully justified in deleting the addition made by the AO – Decided against revenue. Addition u/s 40A(3) – Held that:- CIT(A) was rightly of the view that the disallowance made by the AO u/s 40A(3) observing that there was no evidence produced by the assessee to establish that the amount against purchase of bardan was paid by demand draft - there is no evidence placed even to support and substantiate the same - the payment made for the purchase in cash is covered by the exceptions given in Rule 6DD(e)(i) – He has not been able to establish or show as to how the bardan can be regarded as a forest produce – the order of the CIT(A) is upheld – Decided in favour of assessee.
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