2025 (4) TMI 1761

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.... to challenging the order of Ld. CIT(A) in confirm the additions made u/s 69C of the Act. Therefore I have decided to take up all the grounds together and to adjudicate the same through the present consolidated order. 3. After hearing both the parties at length and after going through the records, I noticed that assessee is in the business of selling new born babies products and the case of the assessee was reopened u/s 147 of the Act on the basis of third party information received from the Sales Tax Department, Mumbai which alleged that certain suppliers were engaged in hawala transactions and since the assessee had made purchases from the said suppliers therefore additions were made on the ground that assessee could not produce the sa....

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....reof, as the case may be, may be deemed to be the income of the assessee for such financial year. Provided that, notwithstanding anything contained in any other provisions of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income." 7. Section 69C deals with unexplained expenditure. It says that where an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof or if the explanation offered by him is in the opinion of the AO not satisfactory, then the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for the ....

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....iry in respect of the said purchases, the AO cannot make additions u/s 69C of the Act by merely relying upon the information obtained from the Sales Tax Department without providing assessee any opportunity of cross examination and for non response to notice u/s 133(6) of the Act. 9. In this case all the payments for the said purchases to the concern parties were through proper banking channel and there is no evidence brought on record by the AO to establish that the said payments were routed back to the assessee, the additions made by the AO u/s 69C of the Act are thus unsustainable, in this regard I am fortified by the decision of Hon'ble Bombay High Court in the case of CIT Vs. Nikunj Eximp Enterprises [2015] 372 ITR 619 (Bom HC). ....