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2010 (12) TMI 104 - ITAT, MUMBAIUndisclosed sources - payment of custom duty from undisclosed sources - The assessee has only filed confirmation letters but could not produce the parties to prove that custom duty in respect of ‘high seas sales’ was paid by the buyers. Presuming that the assessee could not prove the payment of the custom duty but as rightly argued by the Ld. Counsel, proviso to section 69C is inserts w.e.f. the A.Y. 1999-2000 and as per the said proviso if any addition is Made on account to unexplained expenditure then same is treated as deemed income of the assessee and no deduction is allowable under any head of the income. Prior to 1.4.1999, as per the settled law, when the expenditure is not unlawful or illegal the same was allowable. We, therefore, accept the alternate plea of the assessee that custom duty being a statutory duty payable by the assessee and it is a business expenditure to the extent of the addition, the same is to be allowed as business expenditure.
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