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2019 (12) TMI 1151 - AT - Income TaxUnexplained expenses u/s 69C - Addition on basis of the information obtained from the website of the sales tax department about the cancellation of registration certificate of the parties - claimed to be allowed as "business loss" u/s 28 or 37 - HELD THAT:- assessee has already declared the GP in its books of accounts by recording the sales and the corresponding purchases. But to prevent the possible leakage of the Revenue, as the purchases from the local/grey market is normally cheaper, we are inclined to make the ad hoc addition at the rate of 10% of such purchases in order to meet the end of justice and to stop the ongoing dispute. Claim of Bad Debts - assessee failed to furnish the details of the parties viz a viz details of the sales made to them - Held that:- It is the settled law that the losses incurred by the assessee in the course of the business activities are allowable deduction either under section 37(1) or 28 of the Act - assessee is eligible for the deduction of the impugned loss as incurred in the course of the business but not as bad debts under the provisions of section 36(1)(vii) of the Act. Addition made for ₹ 4,899/- on account of the Act VAT credit written off. - Held that:- there was an allegation from the authorities below that the assessee has purchased the goods from the parties whose VAT/ CST registrations were cancelled. In the absence of the assistance from the side of the assessee, we can draw an adverse inference by holding that such amount of VAT credit relates to such parties i.e. the registrations were cancelled. If that be so, then it is clear that the claim was made by the assessee on account of such VAT credit for the purchases from the parties not having valid registration number. Therefore, it is inferred that such claim of the assessee was not bona fide in the absence of contrary documentary evidence. Thus we not find any reason to interfere in the order of the Ld. CIT(A). Hence, the ground of appeal of the assessee is dismissed.
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