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TMI Blog2021 (12) TMI 1294X X X X Extracts X X X X X X X X Extracts X X X X ..... of the learned Commissioner of Income tax (Appeals)-3, Mumbai where the addition of Rs. 3,22,962/- has been confirmed as unexplained expenditure under section 69C of the Act on account of difference of balances of creditors. 3. Briefly stated, the facts show that the assessee is a company, manufacturer of speciality chemicals and other materials. It filed its return of income on 24/09.2010 declaring loss of Rs. 6,53,81,473/-. During the course of assessment proceedings, the assessee submitted several details. With reference to one sundry creditor, M/s Arihant Chemical Corporation, assessing officer noted that the amount as per the books of the assessee shows credit balance of Rs. 2,00,30,088/- whereas as per the confirmation submitted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taining the confirmation under section 133(6) of the Act from the creditors. Such statements were not given to the assessee but only the balances were given and assessee was asked to explain the difference. He submitted that assessee explained that the difference as arising on account of opening balance. He also referred to the reconciliation of closing balances placed at pages 19 and 20 of the paper book. Further, he submitted that as there is no expenditure incurred by the assessee, which are not recorded in the books of account of the assessee, the provisions of section 69C do not apply. He, therefore, submitted that the addition of Rs. 3,22,962/- made by the learned assessing officer and confirmed by the learned CIT (A) deserves to be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee as payment. Therefore, according to us provision of section 69 C cannot be attracted in this case, unless revenue brings on record any proof of incurring such expenditure. Hence, we reverse the orders of lower authorities and direct ld AO to delete the addition of Rs. 322962/- made u/s 69C of the Act. Accordingly, Ground no 1 of the appeal of the assessee is allowed. 8. In the Result ITA no 312/Mum/2020 filed by assessee is allowed. 9. ITA No. 313/Mum/2020 Is appeal filed by the assessee against the order passed by the learned CIT(A)-3, Mumbai for assessment year 2012-13 on 30/10/2019 wherein the appeal filed by the assessee against the order passed under section 143(3) of the Income-tax Act, 1961 by the DCIT 1(3)(1) for assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason for what the advances have been given. He submitted that the total advance given is to 117 persons and almost all the advances are less than Rs. 1 lakh each. He referred to the other advances, which are above Rs. 1 lakh stating that one of the advances is for medical treatment and another is educational advance of employees. He submitted that all the advances are given as per the company policy and to the staff of the assessee company. He, therefore, submitted that there cannot be any reason that above advances can by any stretch of imagination be considered as non-business advances. He, therefore, submitted that the lower authorities have incorrectly made the disallowance. 12. The learned departmental representative vehemently supp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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