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2023 (8) TMI 1081 - MADHYA PRADESH HIGH COURTDisallowance of expenses u/s 40A(3) - Failure to provide any basis for working out the difference between the contents of two financial datas in the parallel books maintained by ABCL Ltd. and the Assessee himself - ITAT deleted te addition - HELD THAT:- Tribunal also found that data available on record was only in respect of liability but not as regards assets or expenditure. Tribunal thus found that in view of above AO wrongly held the difference to be invested in fixed assets and undisclosed expenditure, without any supportive material on record. Tribunal therefore drew inference that Assessee had incurred certain liability which though recorded in the parallel Books of Accounts of the Assessee was not recorded in the regular Audited Books of Account. The Tribunal in this background found that the case of the Assessee was of suppression of liability in the Audited Books of Account vis-a-vis the parallel set of Books of Account and; therefore, it was rightly concluded by the Tribunal that under the law undisclosed investment or undisclosed expenditure can be subject matter of addition either u/s 69 or 69A or 69B or 69C of the IT Act but in the present case the issue is not in regard to undisclosed investment or expenditure but undisclosed liability. Accordingly, the Tribunal held that the findings of the AO in this regard are based purely on assumption and; therefore, the addition made by the Assessing Officer was held unjustified. Decided against revenue.
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