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2017 (10) TMI 240 - AT - Income TaxAddition u/s 69C - assessee has allegedly made sales of gold bars during the impugned assessment year wherein sale proceeds have been stated to have been received in cash from undisclosed buyers which has been deposited by the assessee in the bank account of the assessee and hence sources of these cash deposit could not be satisfactorily explained by the assessee - Held that:- The assessee in the instant case as we have seen could not satisfactorily explain the sources of cash deposit of huge magnitude of more than ₹ 49 crores in his bank account which he claimed to be from cash sales from gold bars to the persons wherein the identity of the buyers are not revealed by the assessee. Thus, the assessee could not satisfactorily explain the sources of cash deposit in the bank account and consequently sources of incurring expenditure by way of purchases claimed by the assessee in its Profit and Loss Account of ₹ 48.78 crores could not be satisfactorily explained by the assessee and onus cast u/s 69C was not satisfied which will make amount covered by such expenditure represented by purchases of gold bars to be deemed income of the assessee under the deeming fiction of Section 69C. The said Section 69C is further controlled by proviso which has an overriding effect and provides that notwithstanding anything contained in any other provision of the 1961 Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income. Thus , Section 69C read with proviso makes it abundantly clear that the amount represented by expenditure incurred by the assessee towards purchases of gold bars constitute income within deeming fiction of 69C of the 1961 Act. Thus, we set aside the order of learned CIT(A) and confirm the addition to the tune of ₹ 49,17,69,925/- (Rs Forty nine crores seventeen lacs sixty nine thousand nine hundred and twenty five only ) for detailed reasons as cited above - Decided against assessee. Addition in respect of difference in closing capital of Meenakshi Enterprises (proprietary concern of the assessee) - addition proposed by learned CIT(A) based on remand report of the AO - Held that:- The said additions has been made by learned CIT(A) for the first time in his appellate order which has led to enhancement of the assessment. The assessee had contended that the assessee was never show caused by learned CIT(A) before such enhancement of income and the principles of natural justice are vitiated while as per learned CIT(A) orders the assessee was asked to explain the said difference in capital to which the assessee never replied. In fitness of things in the interest of justice, the assessee deserves one more opportunity and let the matter be restored to the file of the AO for fresh adjudication on merits after giving opportunity of being heard to the assessee and after considering the replies of the assessee.
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