TaxTMI 
TaxTMI 
2003 (2) TMI 58
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....he assessee to satisfactorily explain the said expenditure. The learned Tribunal concurred with the finding of the appellate authority to the extent that no addition can be made if the same is negated by payment. But it is to be examined, since the amount has not been shown in the regular books of account, in the context of the construction work as to whether this amount was reasonably spent or not. Therefore, the matter was remanded for reassessment to the Assessing Officer. An application for review or rectification under section 254(2) was filed on behalf of the assessee. This was allowed and the order of remand was recalled. In the circumstances, the Department had sought for the reference on the question, which is as follows : "Whet....
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....cord", the Code of Civil Procedure uses the phrase "on the face of the record". Therefore, the scope of section 254(2) of the Income-tax Act is much more limited than the width of Order 47 of the Code of Civil Procedure. This distinction was noted by the apex court in ITO v. Asok Textiles Ltd. [1961] 41 ITR 732 referring to Maharana Mills (Pvt.) Ltd. v. ITO [1959] 36 ITR 350 (SC). Mere complexity of the problem or necessity of genuine argument for discovery of mistake, by itself is not a sufficient reason to oust the jurisdiction of the Tribunal to rectify the mistake. If it could be discerned with some precision after a fair probe into the record and reasonable and probable conclusion can be arrived at and that the court's conscience has b....
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....rom the record or not. In order to appreciate the situation and understand the order in the context it is passed, we are to refer to section 69A read with section 69C of the Income-tax Act, 1961. Section 69A deals with unexplained money if found at the hands of the assessee unless satisfactorily explained is deemed to be an income at the hands of the assessee for such financial year when it was seized. Section 69A deals with receipt of income on the basis of existence of assets mentioned therein. Whereas section 69C deals with unexplained, source of expenditure. If from documents it appears that there was an expenditure, unless its source is satisfactorily explained, the same would also be deemed to be the income of the assessee for such fi....
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....r." A plain reading of the above text of the order indicates that the learned Tribunal had come to a finding that this expenditure was not debited in the books of account. The observation that no addition can be called for because the addition will be negated by the payments, a view taken by the Patna Bench in Nishant Housing Development (P.) Ltd. v. Asst. CIT [1995] 52 ITD 103, is an observation with regard to the said decision that no addition can be called for if negated by payment. Such a view is possible when the amount is treated under section 69A as an asset and treated as an income, then it would be negated by the expenditure if shown. In this case, the addition could not be made under section 69A since no receipt of the amount w....
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....he expenditure and avoidance of addition. This addition has not been sought to be made under section 69A. The addition is to be made under section 69C under which an expenditure, the source whereof by fiction of law is a deemed income and as such liable to be added. But this has to be seen in the context of the facts and circumstances of the case, as was rightly held by the learned Tribunal in its original order since been reviewed subsequently. The question of negation by payment can arise only when the source of the expenditure is satisfactorily explained, which is yet to be examined on remand. It is not the reasonableness of the expenditure that requires satisfactory explanation. It is the source of such expenditure, which needs to be sa....