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2023 (8) TMI 495 - ITAT CHENNAIDisallowance of expenses in respect of its earning from the activity of chit - HELD THAT:- It is elementary that when expenditure is claimed, the assessee has to support the same with material/evidence that such an expenditure it incurred; and show that the expenditure has been incurred wholly and exclusively for the purpose of business. Having failed to produce any material/evidences to support the claim of expenditure, the action of the Ld.CIT(A) to confirm the action of the AO cannot be faulted. Even though, assessee’s stand on this issue at the inception itself was that finance business was its primary business and it showed as miscellaneous income foreman commission from chits, wherein it reflected only the net income [i.e, after deducting overhead expenses which included default money, salary, etc]. According to the Ld.AR, the cash book was seized during the search, from which, it could be discerned that the expenditure claimed was incurred by the assessee for running of chits. Be that as it may, however, before us assessee has neither kept the copy of the cash book found/seized during the search in the form of Paper Book nor the assessee filed any materials/evidences to substantiate the expenditure claimed by the assessee other than the oral assertion as noted supra. In the absence of any relevant evidence or material to support the expenditure claimed by the assessee, the impugned action of the Ld.CIT(A)/AO cannot be held to be perverse and therefore, upheld. Unexplained cash found during search - AO on this issue noted that no books of accounts are maintained by the firm - HELD THAT:- We are of the view that the assessee’s assertion that he had some loan received in his hands from 01.04.2017 to date of search, cannot be brushed aside, which fact need to be examined/verified. Since this fact has not been looked into by the AO/the Ld.CIT(A), the assessee has pleaded to restore this issue back to the file of the AO. Having taken note of the sworn statement of assessee about amount of loans returned back to it as well as AO’s findings recorded we set aside the impugned order of the Ld.CIT(A) and restore the matter back to the file of the AO for re-examination/verification - Decided in favour of assessee for statistical purposes.
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