Section 69C additions fail where expenditure is recorded in books and supported by documents, banking trails, and TDS records.

Section 69C cannot be applied to expenditure already recorded in the regular books where the source is not shown to be unexplained or unsatisfactory. The Tribunal found that amounts reflected through ledger entries, bank statements, bills, vouchers and TDS records were not amenable to an ad hoc unexplained-expenditure addition, and one item was treated as a recorded repayment or reimbursement rather than expenditure or cessation of liability. For brokerage, commission and mining expenses, the assessee discharged the primary onus through supporting documents and banking evidence, while a Revenue reliance on an uncorroborated statement was insufficient. Additions based on suspicion, without rejection of books or specific defects, were impermissible.

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Issues: Whether additions made by invoking section 69C on account of alleged unexplained expenditure, including amounts shown in the regular books of account and supported by ledger entries, bank statements, bills, vouchers, TDS records and other corroborative material, could be sustained.

Analysis: Section 69C applies only where an assessee has incurred expenditure and either offers no explanation about the source of such expenditure or the explanation offered is not satisfactory. On the facts, the amounts in dispute were found to be reflected in the regular books of account and the source of expenditure was not shown to be unexplained. For the first item, the amount was held to be neither expenditure nor cessation of liability, but a recorded repayment or reimbursement transaction. For the building repairs and maintenance item, the Tribunal agreed that the expenditure was recorded and that the source had not been doubted, so section 69C could not be applied; the nature of part of the amount was treated as falling outside section 69C. For the brokerage and commission and mining expenses, the Tribunal found that the assessee had discharged the primary onus through supporting documents, banking channels and TDS compliance, while the Revenue relied mainly on a statement without independent corroboration. The Tribunal also accepted that an ad hoc or presumptive invocation of section 69C was impermissible where the books were not rejected and no specific defect was established.

Conclusion: The additions under section 69C were not sustainable. The Revenue's grounds were rejected and the relief granted by the appellate authority was upheld.

Ratio Decidendi: Section 69C cannot be invoked for expenditure already recorded in the regular books of account when the source of such expenditure is not shown to be unexplained or unsatisfactory, and a disallowance cannot rest merely on suspicion or an uncorroborated statement.

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