When assessee had provided all evidences of payment and payments were recorded in books of account, they were not liable to be added u/s 69C.

When assessee had provided all evidences of payment and payments were recorded in books of account, they were not liable to be added u/s 69C.

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When assessee had provided all evidences of payment and payments were recorded in books of account, they were not liable to be added u/s 69C.

Income from undisclosed sources Unexplained expenditure Addition Validity Assessee filed return of income During assessment proceeding, AO issued SCN to sundry creditors to verify genuineness of parties from whom certain purchases were made by assessee However, no reply was received by AO hence a SCN was issued to assessee to produce those parties “personally” to verify its genuineness In reply, assessee submitted certain documents/evidences to prove genuineness Neither parties from whom purchases were made nor assessee could prove genuineness of transaction—Therefore, AO hled that onus lied upon assessee could not be discharged in a given time frame despite opportunity notice issued from this office Accordingly, AO passed assessment order after making additions u/s 69C Before CIT(A), assessee filed additional evidences which was remanded to AO CIT(A) noted that in remand report AO objected to acceptance of such additional evidence CIT(A) overruled AO and held that assessee had submitted confirmation from parties, their ledger accounts and bank statements for payments AO had not brought any evidences on record to substantiate its claim that purchases made from creditor were not genuine Non-submission of confirmations within given time was no ground to doubt genuineness of transactions—AO had accepted genuineness of those parties in assessee’s own case in subsequent AYs Subsequently, CIT(A) allowed assessee’s appeal Held, AO gave an extremely short notice, wherein notices could not be responded However, all necessary details were subsequently available and same were provided to AO in remand proceedings—All necessary confirmations of transactions were available, and all payments were through banking channels No discrepancy in this regard was noted Additional unexplained expenditure as mandated in s. 69C was not sustainable, as s. 69C provides that where in any FY an assessee had incurred any expenditure and he offers no explanation about source of such expenditure or part thereof, or explanation, if any, offered by him was not, in AO’s opinion, satisfactory, amount covered by such expenditure or part thereof, as case may be, might be deemed to be assessee’s income for such FY When assessee had provided all evidences of payment and payments were recorded in books of account, they were not liable to be added u/s 69C Revenue’s appeal dismissed.

DEPTUY COMMISSIONER OF INCOME TAX vs. R.R. OOMERBHOY PVT. LTD.

(2019) 55 CCH 0155 MumTrib

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