2001 (7) TMI 303

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....ds ground No. 1 the brief facts of the case are that during the course of search certain unrecorded purchases of Rs. 1,92,017 were found. The assessee's submission was that these goods had been returned to the dealers as rejected and promised to file a letter from the dealer to that effect. In spite of an opportunity being provided by the AO the assessee could not produce any evidence in respect of the purchases and also did not seek any more time for filing any such evidence. Therefore, it was proved that the purchases had been made out of secret funds of the assessee. 3. The CIT(A) without going into the merits of the case held that if the assessee had made unrecorded purchases of Rs. 1,92,017 then the same should be first included in ....

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....g unexplained expenditure under s.69C. Even under s. 69C, expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income for and from asst. yr. 1999-2000. The facts of the case before us are entirely different from the facts of the case relied upon by the authorised representative. In the case before us it has been admitted by the assessee that unexplained investment has been made in unrecorded purchases. Therefore, the addition is called for under s. 69 of the IT Act. Under this section the amount of unexplained investment may be deemed to be the income of the assessee if (i) such investments are not recorded in the books of account, if any, maintained by him for any source of inco....

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....uctions, Nagpur, which have been reproduced in his order in appeal No. CIT(A)/27/1997-98 for asst. yr. 1995-96, have been reiterated. The CIT(A) found that the assessee has disclosed net profit before depreciation, salary and interest at 3.52 per cent as compared to the net profit of 3.02 per cent disclosed in the preceding assessment year when the business was proprietary concern. Further the authorised representative had accepted before the CIT(A) that the income can be assessed at Rs. 2 lakhs and the addition of Rs. 1,92,017 has been deleted by the CIT(A). It followed that out of addition of Rs. 1,66,734 the addition to the extent of Rs. 1,33,658 stood included in the sum of Rs. 2,00,000. The addition that remains to be considered, accor....