TaxTMI 
TaxTMI 
2026 (8) TMI 965
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee in response to which the assessee filed the requisite details. During the course of assessment proceedings the Assessing Officer noted that the assessee has been created with the object to receive the funds from its members and to provide credit facilities to its members only. The assessee society has claimed deduction u/s. 80P to the extent of Rs. 1,01,44,079/-. He observed from the Income & Expenditure Account that the assessee has also made huge investments in the form of fixed deposits in different banks for earning interest amounting to Rs. 59,01,465/-. The Assessing Officer disallowed the deduction to the extent of Rs. 59,01,465/- on the ground that the same is received from the banks or financial institutions on deposits placed with them. He was of the opinion that the said interest was not eligible for deduction u/s. 80P. The Assessing Officer further increased the income of the assessee by 1,31,84,194/- by invoking the provisions of section 69C r.w.s. 115BBE of the Act. He accordingly determined the total income of the assessee at Rs. 1,90,85,659/-. 3. In appeal the Ld. CIT(A) / NFAC deleted both the additions. On appeal by the Revenue, the Tribunal restored the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re was voluntary. The explanation was tendered only when the discrepancy was detected by the AO. It is a settled legal principle that an explanation offered after detection cannot be considered voluntary or bona fide unless corroborated by contemporaneous evidence, which in this case is absent. The appellant's assertion that section 69C is inapplicable because depreciation is a notional allowance also does not stand scrutiny. The section applies where any expenditure or claim is found to be unsubstantiated. The term "expenditure" in fiscal jurisprudence is not confined merely to actual cash outflows but extends to any deduction claimed from income that remains unexplained or unverifiable. The excess depreciation claimed by the appellant had the direct effect of reducing taxable income. This reduction arose from figures not supported by the books of account and not reconcilable with the closing WDV of the preceding year. Such a claim, being unsubstantiated by valid records, falls squarely within the ambit of unexplained expenditure contemplated under section 69C. The burden of proof under this section lies on the assessee to demonstrate the correctness of its claim. In ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....39;s argument, if accepted, would set an undesirable precedent where any inaccuracy could be later explained away as inadvertent error without accountability. In the overall circumstances, the appellant's explanation, though articulate, fails to meet the test of satisfactory evidence under section 69C. The excess depreciation claim of Rs. 1,31,84,194/- cannot be treated as a mere clerical lapse. The figures in the return and audit report were consciously verified and uploaded. The explanation is post-facto, lacking contemporaneous corroboration, and the correction through a revised Form 3CD carries no statutory sanctity in absence of a revised return. The Assessing Officer's finding that such unsubstantiated claim amounts to unexplained expenditure under section 69C is, therefore, justified. The provisions of section 115BBE have been rightly invoked for taxing the same at the prescribed rate. In view of the above detailed discussion, and considering the totality of facts, legal provisions, and the directions of the Hon'ble ITAT, it is held that the appellant has not been able to furnish any cogent, verifiable, or legally sustainable explanation to just....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bmitted that if the addition made by the Assessing Officer and upheld by the Ld. CIT(A) / NFAC is sustained, then in view of the CBDT Circular No.37/2016, the business income of the assessee will be increased and the assessee will be entitled to the enhanced deduction u/s. 80P. 7. The Ld. DR on the other hand heavily relied on the order of the Ld. CIT(A) / NFAC. 8. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We find the Ld. CIT(A) / NFAC in the instant case after the matter was restored by the Tribunal to his file sustained the addition of Rs. 1,31,84,194/- made by the Assessing Officer u/s. 69C r.w.s. 115BBE of the Act, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the Ld. Counsel for the assessee that since the assessee is entitled to deduction u/s. 80P, therefore, if the addition is made by the Assessing Officer u/s. 69C, then the business income of the assessee will go up and the assessee is entitled to the enhanced deduction because of the higher business income. 9. We find some for....