Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2024 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (3) TMI 476 - AT - Income TaxUnexplained expenditure - certain entries were found unmatched / not accounted for in the books of accounts in the expense ledger of the assessee - As per AO assessee has not been able to match the expenses on one to one basis and in absence of a clear and satisfactory explanation, the expenses remained unexplained - CIT(Appeals) dismissed the appeal of the assessee by observing that it is an uncontroverted fact that the impugned expenses have not been accounted for in the books of accounts and explanation of the assessee that these expenses were first incurred by the employees at respective sites, which were subsequently reimbursed by the assessee to employees is also not acceptable HELD THAT:- Section 69C came into force with effect from 01.04.1976, the provision is merely clarificatory and embodies a rule of evidence which is even otherwise quite clear. When there is direct and clear evidence of expenditure not recorded in the books, the ITO would be entitled to treat the amount of expenditure or unexplained part of it as income from undisclosed sources, as the case of proven expenditure is in principle no different from that of a cash credit. See YADU HARI DALMIA [1980 (5) TMI 22 - DELHI HIGH COURT]. In the instant facts, we observe that the assessee has not been able to give any plausible explanation for the aforesaid expenses i.e. why they were not accounted for in the books of accounts, the assessee has not been able to file any confirmation of employee’s to whom such expenses were reimbursed, and the assessee has also failed to show entries of reimbursement in his cashbook as well. The assessee has only relied on the fact that books of accounts were audited and turnover of the assessee has increased during the year. However, looking into the instant facts and the plea of the Ld. Counsel for the assessee that a reasonable disallowance may be made, in the interests of justice, the disallowance of restricted to 25% of disallowance made by the AO. Appeal of the assessee is partly allowed.
|