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2023 (4) TMI 126 - AT - Income TaxAdditions made u/s 68 - capitation fee paid for admission of assessee’s children - Additions u/s 68 instead of u/s 69C - incriminating materials found and statement recorded in course of the search and seizure operation carried out or not? - HELD THAT:- As the primary condition of section 68 that the amount must be credited to the books of account of the assessee is not fulfilled. Though, Commissioner (Appeals) has made an attempt to cover up the legal lacuna by stating that the AO has treated the payment of fee in cash as unexplained expenditure under section 69C, however, such observation of learned Commissioner (Appeals) is factually incorrect, hence, cannot be accepted. Thus, the conditions of section 68 having not being satisfied, the addition made under the said provision has to be deleted. Accordingly, additions made u/s 68 of the Act are hereby deleted. Disallowance of part of the expenses on ad-hoc basis - HELD THAT:- As 50% of the expenditure claimed has been disallowed on purely ad-hoc basis. The disallowance made not being backed by valid reasoning is deleted. Unexplained deposits in bank account - HELD THAT:- As the amount was paid through account payee cheque to the assessee and in the said confirmation, the concerned person has clearly stated that the amount paid was towards consideration of the car sold. Thus, when the assessee has furnished evidence to prove the source of the deposit, no addition can be made under section 68 of the Act without conducting any inquiry. Other deposits the assessee has stated that said deposit was out of fees paid by the patients. As it appears on record, the first appellate authority has rejected assessee’s explanation without making any inquiry, either himself or through the AO to ascertain the veracity of assessee’s claim - delete the addition made in assessment year 2012-13. Assessee appeals are partly allowed.
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