TaxTMI 
TaxTMI 
2026 (8) TMI 1434
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....llowing grounds of appeal: Ground No. 1 The order passed by the learned Commissioner of Income-tax (Appeals) is bad in law, erroneous on facts and opposed to the provisions of the Income-tax Act, 1961. Ground No. 2- Addition under Section 69C The learned Commissioner of Income-tax (Appeals) erred in confirming the addition of Rs. 10,70,807 treated as unexplained expenditure under section 69C of the Income-tax Act, 1961, without establishing that the appellant had actually incurred any such expenditure and without bringing any material evidence on record. Tax Effect relating to this Ground: Rs. 8,35,229 Ground No. 3 - Interest under Section 234A The learned Commissioner of Income....
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....) of the Income-tax Act, 1961 ("the Act") for the assessment year 2019-20. On the basis of information available with the Assessing Officer, the case of the assessee was reopened under section 147 of the Act and, accordingly, notice under section 148 of the Act dated 06.04.2023 was issued. In response to the said notice, the assessee filed the return of income on 29.04.2023 declaring total income of Rs. 2,30,850/-. During the course of assessment proceedings, the Assessing Officer observed that the assessee had made total purchases of Rs. 12,48,500/- and claimed expenses of Rs. 46,008/-, aggregating to Rs. 12,94,508/- during the year under consideration. However, the Assessing Officer further observed that the assessee had made cash payment....
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....by the Assessing Officer as unexplained expenditure under section 69C of the Act. Further, inviting our attention to the provisions of section 69C of the Act, the Ld. AR submitted that an addition under the said provision can be made where the assessee has incurred an expenditure and either offers no explanation about the source of such expenditure or the explanation offered by him regarding its source is not found satisfactory by the Assessing Officer. In the present case, the Assessing Officer has not doubted the source of the payment of Rs. 10,70,807/-. On the contrary, the Assessing Officer himself has recorded that the payments were made through bearer cheques drawn on the bank accounts of the assessee. Therefore, even if the assessee ....
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.... cause why proposed variation should not be made but assessee remained non responsive. Where in the year the taxpayer has incurred any expenditure of Rs. 10,70,807/- and the explanation, if any, offered by him is not, in the opinion of the Assessing Officer, 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 taxpayer for such year. Aforesaid unexplained expenditure which is deemed to be the income of the taxpayer by virtue of section 69C shall not be allowed as a deduction under any head of income. In view of above discussion, the assessment is completed under section 147 r.w.s.144B with variation. 8. On perusal of the above, we find that ....
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....sessee. In the present case, the Assessing Officer has not recorded any dissatisfaction regarding the source of the payments in question. Rather, the assessment order itself records that the payments were made through bearer cheques from the bank accounts of the assessee. The basis of the addition is that the payments made through bearer cheques exceeded the purchases and expenses claimed by the assessee by Rs. 10,70,807/-. In our considered view, the inability of the assessee to explain the purpose or destination of such excess payments, by itself, cannot satisfy the statutory requirement of section 69C of the Act when the source of the payments has neither been doubted nor found unexplained by the Assessing Officer. Accordingly, in the ab....