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TMI Blog2023 (11) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... in the assessee s case, repayment of loan does not constitute any expenditure and as the source of such repayment was also explained before the AO as well as the Principal Commissioner of Income Tax, Section 69C could not have invoked. It was also further observed that the receipts had already been taxed in the hands of the assessee and the assessee had filed an appeal against the order which was finally closed under the Vivad se Vishwas Scheme . Accordingly, in our opinion, the Tribunal was right in holding that it was not a case where there was lack of inquiry and therefore there was no ground on which revisionary powers under Section 263 could have been invoked. Decided in favour of assessee. - HONOURABLE MR. JUSTICE BIREN VAISH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gross inadequacy in inquiry conducted as per order of the Hon'ble Supreme Court in case of the Commissioner of Income Tax Vs. M/s. Paville Projects Pvt. Ltd. (CA No. 6126 of 2021 (SC))? 2. Facts in brief indicate that the return of income was filed by the respondent assessee for the Assessment Year 2017-18. On verification of records, it was seen that the assessee had made repayment of unsecured loans of Rs. 21,83,802/- to bogus shell companies. A show cause notice was issued to the assessee. On failing to produce verifiable evidence, the entire expenditure of Rs. 21,83,802/- was required to be treated as deemed income under Section 69C of the Income Tax Act and was required to be taxed under Section 115BBE. As a result, the fai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duly examined by the Assessing Officer in the assessment proceedings and conscious decision was taken after due application of mind. Accordingly, it is not a case of lack of inquiry by the Assessing Officer. Secondly, as regards applicability of section 69C of the Act, we observe that section 69C applies in case of unexplained expenditure, source of which remains unexplained. In the assessee s case, repayment of loan does not constitute any expenditure and further, the source of such repayment was also explained by the assessee both before the Assessing Officer as well as PCIT. Accordingly, in our view section 69C of the Act cannot be invoked in the instant facts. Further, in the instant facts even if one were to invoke section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make addition under Section 68 read with Section 115BBE of the Act. The assessee had submitted an explanation that the repayment of unsecured loan was made from sell proceeds from one of the debtors M/s. Bhabha Exports and therefore adequate inquiry was done and it was not a case of lake of inquiry. In context of applicability of Section 69C it was held by the Tribunal that the section would apply to unsecured expenditure, source of which remains unexplained. The Tribunal held that in the assessee s case, repayment of loan does not constitute any expenditure and as the source of such repayment was also explained before the Assessing Officer as well as the Principal Commissioner of Income Tax, Section 69C could not have invoked. It was also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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