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TMI Blog2022 (7) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... r the reason that the assessee has incurred loss for the year even after undisclosed income - assessee has incurred huge expenditure for the movie Thalaivaa subsequent to the period of search. Further, additional income offered during the course of such is also on account of cost of purchase of movie Thalaivaa. Therefore, once income is credited to the profit loss account, corresponding expenditure relatable to said income also needs to be debited into the profit loss account. In this case, the assessee has done exactly the same which resulted in loss for the year under consideration. In fact, the learned CIT(A) has considered detailed written submissions filed by the assessee, including financial statements and observed that on the addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the fact that the assessee had declared additional Income of Rs.7,0000,000/- over and above its regular income during the course of search proceedings u/s.132 of the Income Tax Act, 1961 . the learned CIT(A) erred in allowing expenditure claimed in return of income by the assessee against said additional Income of Rs.7,0000,000/-. 2.3 The Id. CIT(A) ought to have appreciated the fact that the assessee had declared additional Income towards cost of purchase of movie. Therefore, expenditure becomes unexplained as per provisions of 69C of the Income Tax Act, 1961 and accordingly, said unexplained expenditure will be deemed to be income as the assessee shall not be allowed as deduction under any head of income as per proviso to section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to justify expenditure incurred for the subsequent period, therefore rejected arguments of the assessee and made additions of Rs.7,00,00,000/- to the total income. 4. Being aggrieved by the assessment order, the assessee filed an appeal before the learned CIT(A). Before the learned CIT(A) the assessee has filed various details, including financial statements to prove that the assessee has accounted and showed income in the books of accounts and considered for taxation. The learned CIT(A), after considering relevant submissions of the assessee and also taken note of various evidences observed that the assessee has declared income of Rs.7,00,00,000/- in the profit and loss account. However, the assessee has shown loss, because it has incu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er and his order should be upheld. 7. We have heard both the parties and considered relevant materials on record. There is no dispute with regard to fact that the assessee had credited sum of Rs.7,00,00,000/- into the profit and loss account. In fact, the Assessing Officer himself had admitted fact that the assessee had included undisclosed income in the profit and loss account. However rejected arguments of the assessee only for the reason that said offer of undisclosed income is in addition to regular income or loss declared for the relevant assessment year. The Assessing Officer further was of the opinion that the assessee could not substantiate the expenditure incurred for the subsequent period. 8. We have given our thoughtful con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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