TaxTMI 
TaxTMI 
2022 (9) TMI 586
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....ee was selected for scrutiny through CASS in order to examine the large expenses reported in AIR. During the course of assessment proceedings, the assessee was called upon by the Assessing Officer to support and substantiate its claim for direct expenses of Rs.6,24,52,237/- as claimed in Schedule-P2. Although some submission was made on behalf of the assessee, the same was found to be sketchy by the Assessing Officer. Since the assessee failed to furnish the relevant details and documents to support and substantiate its claim for direct expenses of Rs.6,24,52,237/- inspite of giving adequate opportunity during the course of assessment proceedings, the Assessing Officer made a disallowance of Rs.2,08,17,445/- being 30% of the direct expenses claimed by the assessee and made an addition to that extent under Section 69C of the Income-tax Act, 1961 ["the Act" in short] to the total income of the assessee in the assessment completed under Section 143(3) of the Act vide an order dated 30.12.2016. 3. Disallowance of expenses amounting to Rs.2,08,17,445/- made by the Assessing Officer was challenged by the assessee before the learned CIT(A). During the course of appellate proceedings be....
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....an addition of Rs. 6,24,52,337/- u/s.69C of the IT Act as unexplained expenditure. 2.4. On the other hand, the appellant submitted that he had submitted all the receipt entries appearing in bank statement with summary along with the copy of bank statements. The actual figures of outsourcing income is clear from this working. The figure of actual receipts in bank comes to Rs.47,14,757/- which shows that figure of Rs.6,33,77,482/- as taken by the AO in assessment order is incorrect. On a plain reading of section 69C it is clear that addition can be made u/s 69C only when source of funds used for incurring the expenditure is not properly explained. In appellant's case the question of examining the source of funds from which the expense have been incurred has never been raised. The AO has never questioned the source and only questioned the genuineness of expenses. The AO has not made any efforts to verify the expenses. All the expenses were made from banking channel, and the AO could have obtained the bank statements from the bank directly, as he had all the information from the mode of original submission and AIR report. However, AO has not made any independent examinatio....
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....en paid in the form of expenditures or from the above money has been received by the appellant. Section 69C is as under:- "Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the Assessing Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case maybe, maybe deemed to be the income of the assessee for such financial year." 2.7. A plain and simple reading of the aforesaid provision reveals that where in any financial year the assessee incurs any expenditure and he fails to offer any explanation to justify the source of such expenditure or if the explanation offered is not satisfactory, the amount covered by such explanation or part thereof as may be necessary, may be deemed to bo the income of the assessee for the said financial year. The language of Section 69C of the A ct stipulates two conditions necessary for deeming the expenditure incurred by the assessee to be his income for the said year (i) where no explanation is offered; and (ii) where the explanation off....
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....firmed. The ground of the appeal is dismissed." 4. Aggrieved by the order of the learned CIT(A), the assessee has preferred this appeal before the Tribunal. 5. At the time of hearing fixed in this case on 22.08.2022, none appeared on behalf of the assessee. It is observed that there was a similar noncompliance on the part of the assessee when this appeal was fixed for hearing on 25.10.2021, 28.01.2022, 09.03.2022 and 09.06.2022. The written submission filed by the Authorized Representative of the assessee, however, is available on record; and, this appeal of the assessee is, therefore, being disposed of after taking into consideration the written submission filed by the assessee, the material available on record and the arguments raised by the learned DR. In the written submission, the assessee mainly has raised the following contentions:- i) The gross receipts and gross expenses adopted by the Assessing Officer at Rs.6,33,77,482/- and Rs.6,24,52,337/- are not correct and the gross receipts of the assessee as well as direct expenses claimed during the year under consideration are actually only Rs.41,75,757/- and Rs.8,40,000/- as reflected in the Profit & Loss Account....
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....ts of the case, learned CIT(A) confirmed the disallowance made by the Assessing Officer out of direct expenses by passing a well discussed order and after considering the contentions raised on behalf of the assessee before him. 7.1 In the written submission filed before the Tribunal, the assessee has claimed that the direct expenses incurred by him during the year under consideration were not Rs.6,24,52,237/- as adopted by the authorities below and the same were only to the extent of Rs.8,40,000/- as reflected in the Profit & Loss Account now filed before the Tribunal. It is, however, observed that the assessee himself during the course of assessment proceedings before the Assessing Officer had made an attempt to explain the direct expenses of Rs.6,00,00,000/- incurred on staff salary & wages and direct payments made to temporary staff amounting to Rs.24,52,337/-. Moreover, the profit and loss account now filed by the assessee is not even signed by the assessee or his authorized representative as a true copy and in the absence of any books of account maintained by the assessee as admitted during the course of assessment proceedings before the Assessing Officer, we are of the vie....