Section 69C addition on agricultural expenditure deleted where payments were traced through bank records and known sources.

Section 69C does not justify an addition where agricultural expenditure is supported by computation of agricultural income, transaction-wise expense details, and bank statements showing payment through known banking channels. The source of the expenditure was not in doubt; the dispute went only to genuineness and evidentiary support, and the record was not properly considered by the first appellate authority. On those facts, the impugned addition was deleted and the income was directed to be recomputed.

---

---

Issues: Whether the addition made towards agricultural expenditure as unexplained expenditure under section 69C was sustainable.

Analysis: The assessee produced computation of agricultural income, transaction-wise particulars of expenditure, source of payment, and bank statements showing that the expenditure was routed through the assessee's bank account. The source of expenditure was not doubted; the objection was confined to genuineness and the evidentiary support for the claim. The materials on record were not properly considered by the first appellate authority, and the facts were shown to be comparable with a later assessment year where income was accepted.

Conclusion: The addition under section 69C was not sustainable and was deleted, with a direction to recompute the income.

Final Conclusion: The appeal succeeded and the assessee obtained relief by deletion of the impugned addition.

Ratio Decidendi: Section 69C cannot be invoked where the expenditure is shown to have been incurred from known and explained sources through banking channels and the source of expenditure is not in doubt, even if its genuineness is questioned.

---