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2023 (5) TMI 1055 - AT - Income TaxUnexplained expenditure u/s 69C - AO observed that the parties to whom the commission was paid were incurring huge losses - HELD THAT:- Commission income has been shown by the respective parties in their return of income and they paid the taxes thereon. Therefore, genuineness of the transaction should not be doubted. Assessing Officer did not make disallowance u/s 37 of the Act but made the addition u/s 69C of the Act, as unexplained expenditure - Even the AO invoked Section 69C only and he confirmed the addition under the said section. Apparently, no addition can be made u/s 69C as assessee made the payment of commission through banking channel which is reflected in the audited financial statements and therefore source of the expenditure is proved. Addition u/s 69C of the Act can be made only when assessee did not offer the explanation about the source of expenditure. AO and the CIT(A) both have failed to justify that how the assessee's explanation regarding source of the expenditure is not acceptable. In fact, both the lower authorities have not raised any doubt regarding the source of the payment of the commission. Therefore, as submitted that addition so made by the AO may be deleted. We note that assessee has proved the genuineness and bona fide of the commission expense. Hence, we are not inclined to accept the contention of the AO in any manner and hence the addition so made is deleted. Hence this appeal of the assessee is allowed.
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