2015 (8) TMI 1426 - AT - Income Tax

Unexplained expenditure u/s.69C - AO made addition in the hands of the assessee by observing that assessee has purchased the land as per MOU dated 18-8-2007 during the year under consideration where Part-B payment is unaccounted payments - Held that - As carefully gone through the order of the Tribunal and found that exactly similar addition was made in case of other group companies, which has been deleted by the Tribunal. As the facts and circumstances during the year under consideration are same, respectfully following the order of the Tribunal, we do not find any infirmity in the order of the CIT(A) for deleting the addition made u/s.69C of the IT Act. Accordingly, we dismiss the appeal of the revenue for A.Y.2008-09. - Decided in favour of assessee.

Summary

Issues:
Appeals filed by revenue against CIT(A) order for assessment years 2008-09 & 2009-10 regarding addition of unexplained expenditure u/s.69C of IT Act.

Analysis:
In the assessment year 2008-09, the revenue contested the deletion of addition of Rs. 5,76,000 on account of unexplained expenditure u/s.69C of the IT Act. The AO had added this amount based on a MOU dated 18-8-2007 related to the purchase of agricultural land by a group. However, the CIT(A) deleted the addition, citing a decision by ITAT that for an addition u/s.69C to be valid, it must be proven that the expenditure was actually incurred and unrecorded in the books. The CIT(A) found the facts similar to other cases affected by the same search and ruled in favor of the assessee.

The appellant's AR presented a chart highlighting the similarities between the case under consideration and that of other land companies. It was noted that no evidence was provided by the AO to prove that the expenditure was actually incurred, and the addition was made solely based on two seized papers. The AR argued that the case was covered by the decision of the Hon'ble Mumbai ITAT in the case of Land Companies on merits due to identical facts.

The Tribunal reviewed the order and observed that similar additions in other land companies' cases had been deleted by the Tribunal. As the facts were the same, the Tribunal upheld the CIT(A)'s decision to delete the addition u/s.69C of the IT Act for both assessment years 2008-09 and 2009-10. The appeals by the revenue were dismissed based on the consistency with previous decisions.

In conclusion, the Tribunal affirmed the CIT(A)'s decision to delete the addition of unexplained expenditure u/s.69C of the IT Act for the assessment years 2008-09 and 2009-10, as the facts and circumstances were found to be identical to other cases where similar additions had been overturned.