The assessee denied the entries representing unaccounted cash ...

Lack of evidence leads to deletion of additions for unaccounted cash expenditure.

Case Laws     Income Tax

November 18, 2024

The assessee denied the entries representing unaccounted cash expenditure, stating they were merely MIS reports for discussion purposes, containing approximate project expenditure estimates. The statements were contradicted, losing evidentiary value. The assessee claimed all expenses were accounted for in regular books, making the addition unsustainable. The notings lacked details like payment dates, recipients, and sources, being mere bald notings without conveying much meaning. The figures were round estimates without supporting cash payments. The document lacked basic details to form an opinion on unaccounted cash payments. No corroborative evidence established unexplained expenditure u/s 69C, making the presumption arbitrary. No direct evidence of unaccounted cash expenditure was provided. The assessee admitted additional income during the search, and the AO made additions in earlier years, covering all unaccounted income. The Tribunal held that undated, unsigned seized papers with no acceptable narration were dumb documents lacking evidentiary value for determining undisclosed income without corroborating evidence. Based on these facts, the impugned additions made solely on loose sheets without corroboration were inadequate to draw adverse inferences of unexplained cash expenditure, warranting deletion.

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