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2016 (11) TMI 210 - MADRAS HIGH COURTAddition u/s 40A(3) - Held that:- There is no dispute that the provisions of s.40A(3) apply to block assessments in general. The provision however, would apply only where expenditure in question has been incurred and claimed in the computation of income. The Supreme Court, in the case of Attar Singh Gurmukh Singh Vs. Income Tax Officer, Ludhiana (1991 (8) TMI 5 - SUPREME Court) reiterates this position as well. In the present case, the Tribunal confirms as a finding of fact at para 17 of its order that no expenditure has been incurred except the investment in gold. The consideration paid towards the investment has been duly brought to tax as unexplained income, such income not having been claimed as expenditure in the computation of income. The objection of the Revenue is that the valuation of the gold per gram is not ₹ 500 but more as revealed by other disallowances made in the order of assessment and if the higher rate was taken into consideration, one could assume that certain expenditure has been incurred and claimed. We are not persuaded to accept this submission in so far as there is no necessity to consider any other valuation except that relating to the subject disallowance, being ₹ 500 per gram adopted by the Assessing officer after due consideration and application of mind. We are thus of the view that the provisions of 40A(3) are wholly inapplicable to the facts and circumstances of this case. The substantial question of law is answered in favour of the assessee
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