2012 (10) TMI 1050 - AT - Income Tax

Tribunal upholds CIT(A) orders, dismisses revenue's appeals on assessment additions

The Tribunal upheld the CIT(A) orders and dismissed the revenue's appeals challenging additions made by the AO for various assessment years. The Tribunal ... Unexplained purchases u/s 69C, disallowance on expenditure - Held that:- the expenditure was accounted in the regular books, the source is obviously explained - Hon’ble jurisdictional High Court in Radhika Creation (supra) held that the focus of section 69C is on the 'source' of such expenditure and not on the authenticity of the expenditure itself - the purchases and sales are accounted for in the books of accounts. Thus, source of the expenditure incurred in purchases is obviously explained - Decided in the favor of assessee. Issues Involved:Appeals by revenue against CIT(A) order for AYs 2003-04 to 2008-09.Cross-objections by assessee challenging legality of assessment under section 153C.Analysis:- The appeals by the revenue challenged the CIT(A) order for various assessment years, disputing additions made by the AO and subsequently deleted by the CIT(A). The issues included unexplained purchases, disallowance of expenditure, and the evidentiary value of statements without confrontation to the assessee.- The assessee filed cross-objections questioning the legality of the assessment under section 153C, arguing that the seized documents did not belong to them and were part of another individual's working papers. They contended that no incriminating material was found, and the assessment was not in conformity with statutory provisions.- The Tribunal referred to a similar case involving M/s Blue Luxury Index Pvt. Ltd., where it was found that all purchases were accounted for in the books of account, and sales were made through account payee cheques. The Tribunal upheld the CIT(A)'s decision to delete the additions based on the explanation of the expenditure source.- Regarding the disallowance of expenses, the Tribunal noted that no specific items warranting disallowance were identified by the AO. As the revenue failed to point out any expenditure not related to the business of the assessee, the Tribunal dismissed the grounds raised by the revenue.- The Tribunal upheld the CIT(A) orders and dismissed the appeals of the revenue. The cross-objections by the assessee were also dismissed as not pressed, given the decision on merits in favor of the assessee.This comprehensive analysis covers the issues raised in the appeals and cross-objections, detailing the Tribunal's findings and decisions based on the facts and legal arguments presented during the proceedings.