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2017 (11) TMI 498 - AT - Income TaxUnexplained expenditure u/s.69C - unexplained purchases - source of the payment - Held that:- Considering the provision of Section 69C where in it has been explained that in any financial year, an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure then the Assessing Officer may make the addition. But in this case, the assessee has produced the bank statement, sales register, purchase register etc; before the Ld. CIT(A). The bank statement clearly shows that the purchases were made through account payee cheque. In addition to this, the assessee has contended from the beginning that the source of the payment was the sale proceeds of these unrecorded purchases only which has been deposited in the bank account and thus, no addition is called for the unrecorded purchases as the GP on this unrecorded purchase has already been taxed in the original scrutiny assessment order u/s 143(3) of the Act, the ld. CIT(A) failed to controvert the same. The assessee has explained the reconciliation of purchases and sales which were not recorded and the Ld. CIT(A) has failed to find out any mistake. Therefore, sources of the purchases were explained by the assessee and hence, it is not a fit case to make the addition u/s 69C - Decided in favour of assessee.
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