Business income versus unexplained expenditure: supported receipts could not be taxed under section 69C or section 115BBE.

Where an assessee substantiates a disclosed business receipt with regular books, tax payment, a sworn statement and supporting affidavits, and the Revenue brings no contrary material, the amount cannot be treated as unexplained expenditure under section 69C. Section 115BBE applies only to income covered by sections 68 to 69D, so the higher-rate regime was inapplicable. The amount was therefore taxable under the normal provisions as business income, and the Revenue's challenge failed.

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Issues: Whether the amount of Rs. 5,08,98,100 found in the seized material could be assessed as unexplained expenditure under section 69C and subjected to section 115BBE, or whether it was assessable as business income declared by the assessee.

Analysis: The assessee had disclosed the receipt as business income in the return filed in response to section 153A, supported it with regular books of account, advance tax payment, sworn statement under section 132(4), and affidavits from persons connected with the real-estate activity. The Revenue did not bring any contrary material to disprove the disclosed business source. Section 69C applies only where expenditure is incurred and the source is not satisfactorily explained, while section 115BBE is attracted only where income falls within sections 68 to 69D. On the facts, the material did not justify treating the amount as unexplained expenditure, and the higher-rate provision could not be invoked.

Conclusion: The addition under section 69C read with section 115BBE was not sustainable, and the amount was liable to be taxed under the normal provisions as business income.

Final Conclusion: The Revenue's challenge failed, and the assessee's treatment of the amount as business income was upheld.

Ratio Decidendi: Where an assessee substantiates a disclosed business receipt with books of account and supporting evidence, and the Revenue fails to rebut it with contrary material, the amount cannot be brought to tax as unexplained expenditure under section 69C or subjected to section 115BBE.

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