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2023 (2) TMI 705 - ITAT DELHIAddition u/s 69C - Unexplained expenditure - HELD THAT:- As evident from the Clause 3 of the MOU, the buyer of event M/s Cinemine Entertainment Pvt. Ltd. has agreed to pay/reimburse the expenses directly to Hotel Leela Palace, Chanakyapuri. It is the specific case of the assessee is that whole expenses were borne by buyer of the event and no payment was made by the assessee. Since, the amounts have not been debited by the assessee and in fact paid by the buyer M/s Cinemine Entertainment Pvt. Ltd., the addition made by the A.O. u/s 69C which was sustained by the CIT(A) is deserves to be deleted. Addition as unexplained money - A.O. was of the opinion that the assessee had failed to discharge its primary onus to explain the incriminating document seized from its premises and an amount was added to the income of the assessee as unexplained money u/s 69A & Section 115 BBE - During the appellate proceedings, the assessee has produced the cancellation letter of MOU by Rajat Pharmachem Ltd. wherein and the same has been refused to be accepted by the Ld.CIT(A) - HELD THAT:- We find that the said cancellation of MOU has been mentioned with the date of coming into effect as 06/06/2014. As per Clause 7 of the Memorandum of Understanding dated 04/04/2014 the MOU came into force once it is executed and valid for a period of one year the said MOU has been cancelled on 06/06/2014 itself and the security deposit was liable to be enchased after expiry of 75 days from the date of execution of the MOU. Since the cancellation has been done within the 60 days from the date of execution of the MOU, the question of encashing by the assessee does not arise. The revenue has not brought anything on record to prove that the amount has been debited from the account of the Rajat Pharmachem Ltd. or credited into the account of the assessee. Hence, in the absence of any evidence to prove either the payment from the bank or in the form of cash by the payer or receipt of the amounts into the bank or otherwise by the assessee, the addition made cannot be sustained. Disallowance of unexplained expenditure u/s 69 - Expenses are not debited in P & L Account and not disclosed - HELD THAT:- As in the remand proceedings, the A.O. accepted that the expenses have been accounted by the assessee in its books of accounts and the payment has been made through the banking channels. However, the A.O. took stand that the said expenditure is not incurred wholly and exclusively for the purpose of business. Since, we find that the travelling expense are part of the business expenses and incurred for the business purposes, the addition made by the AO is being deleted. Addition on treating existing liability is cessation of liability u/s 41(1) - addition has been made based on the suspicion that the liabilities are outstanding more than 3 years and no confirmation from the creditors are field during the assessment proceedings - HELD THAT:- We are of the opinion that the Ld. CIT(A) has committed an error in upholding the addition accordingly, the addition made by the assessee which has been upheld by the CIT(A) is hereby deleted by allowing the Ground No.3 of the Assessee.
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