AI Drafter 
TaxTMI 
TaxTMI 
2026 (2) TMI 701
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....cal conclusions have been drawn having co terminus power with the AO. 2. Law and facts of the case by not proving the sundry creditors of the assessee anywhere from whom purchases were made and doubted by the AO in the absence of supporting documents regarding purchases during assessment proceedings. 3. Law and on facts of the case by merely relying on the submission of the assessee without conducting effective inquiry during appellate proceedings and ignoring the remand report of AO which clearly sates that transport details of only one supplier namely M/s Ink Enterprises from whom purchases of only Rs. 5,27,05,801/- have been made. The assessee provided only transfer details related to the return of goods in the case of M/s Global Ink form whom purchases of Rs. 4,70,58,751/- were made and failed to produce transport details i.e. lorry no. payment details of transporter to justify the actual delivery of goods in case of other suppliers. Therefore, in absence of documentary evidences, the genuineness of transactions and creditworthiness of purchaser/ suppliers, from whom the assessee has purchased goods, is still not proved during appellate proceedings. 3. The ....
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..... 2020-21 and further claimed that she returned the entire purchased goods to the party in A.Y. 2021-22, it was observed that appellant had provided only transport, details related to return of goods in A.Y. 2021-22 not relevant to supply of goods in A,Y, 2020- 21. This raises the question of how the appellant could return the goods unless the same had been received /purchased in the first place? 6.3 Further, on examination of the appellant's submissions and evidence furnished it is seen that as the appellant is an exporter and her unit operates within an SEZ, there is third party authentication for all transactions by Customs authorities. The invoices bear the seal of Authorised Officer (Customs) and the Bills of export of goods for claim of duty drawback have been duly inspected by Customs authorities. As pointed out by the appellant, there is Customs verification at every stage from entry to exit, and the Customs department verifies supplier's details, invoice details, nature and quantity of goods, GST and other compliance requirements. The appellant has also provided evidence of shipping bills, export invoices, and bank payments received from foreign buyers. In....
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.... 69C is found to be unwarranted and is deleted. The appellant's grounds are allowed. 7. In the result, the appeal is allowed." 6. In support of assessee's cross objection, the Ld. AR submitted that addition of Rs. 2,97,66,224/- made by the AO is erroneous as the books of account have not even been rejected by the AO and also there is no applicability of provisions of section 69C of the Act to the facts of the case of the assessee, therefore, the addition made by the AO is liable to be deleted on this account. 7. Ld. DR relied upon the order of the Assessing Officer and stated that AO u/s 69A of the Act after conducting proper enquiry has made the addition after recording the detailed reasons for doing so in length in the order itself and blamed the AO for not conducting enquiry and failed to ensure that effective inquiry and logical conclusions have been drawn having co terminus power with the AO. He further submitted that by not proving the sundry creditors of the assessee anywhere from whom purchases were made and doubted by the AO in the absence of supporting documents regarding purchases during assessment proceedings. It was further submitted that by merely r....
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....nything contained in any other provision 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." 8.1 From a bare perusal of aforesaid provisions, it is abundantly clear that section 69C can be invoked only in a case where the assessee has incurred any expenditure and the assessee offers no explanation about the source of such expenditure. However, in the instant case of the assessee, there can be no dispute about the source of the purchases as all the purchases are duly recorded in the books of accounts of the assessee. 8.2 We find that the Hon'ble Delhi High Court in case of Commissioner Of Income Tax-V vs M/s Radhika Creation 2010 (4) TMI 100 - DELHI HIGH COURT held as under:- "4. The case before us has two dimensions. The first being as to whether the Assessing Officer was right in treating the said sum of Rs 44,38,997/- as unexplained expenditure under Section 69C of the said Act. The second aspect is whether the said addition could legitimately have been made in the course of a block assessment. 5. Insofar as the first aspect of the matter is concerned,....