Assessee's Unexplained Expenditure Addition Upheld by ITAT | Section 69C Ruling

The ITAT Bangalore upheld the CIT(A)'s decision to confirm the addition of Rs. 28,24,000 u/s 69C of the Act for the assessment year 2006-07. The Tribunal ruled that since the assessee failed to prove that the vendor bore the stamp duty and corporation tax expenses incurred during a property purchase, the addition as unexplained expenditure was justified. The appeal was dismissed on March 30, 2012.

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Issues involved: Confirmation of addition u/s 69C of the Act by CIT(A)

The Appellate Tribunal ITAT Bangalore considered an appeal against the order of the CIT(A)-I, Bangalore, regarding the addition of Rs. 28,24,000 made u/s 69C of the Act for the assessment year 2006-07. The assessee, a property development company, had purchased a property in Delhi and incurred stamp duty and corporation tax expenses of Rs. 28.24 lakhs. The Assessing Officer added this amount as unexplained expenditure. The CIT(A) confirmed this addition, stating that the burden was on the assessee to prove that the expenditure was borne by the vendor, which was not adequately supported by evidence. The Tribunal upheld the CIT(A)'s decision, noting that the purchaser typically bears stamp duty in property transactions, and since the assessee failed to provide evidence that the vendor had incurred the expenses, the addition was justified. The appeal was dismissed, and the decision was pronounced on March 30, 2012.

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