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| The Tax Publishers2019 TaxPub(DT) 5349 (Mum-Trib) : (2019) 179 ITD 0001 : (2020) 207 TTJ 0070 INCOME TAX ACT, 1961
Section 69
When capital asset investment made by the assessee towards construction of capital asset was clearly explained to have been made out of declared undisclosed income pertaining to 'bogus bills' which were booked by assessee in its 'books of account', there was no justification for AO to have made any further addition in respect of the same.
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Income from undisclosed sources - Addition under section 69 - Undisclosed investment - Source of investment explained to be undisclosed income pertaining to bogus purchase bills
AO on the basis of 'diary', found and seized during the course of the search at office premises made addition on account of unexplained investments in various capital assets by incurring expenditure in cash. Assessee explained that cash received back against payment made towards 'bogus purchases' was used to make investments. AO rejected this on the ground that investment made by assessee could be from receipt of 'On money' on sale of flat, etc. Held: Perusal of seized annexure clearly revealed that 'source' of unexplained investment/expenditure in acquisition of 'capital assets' was the cash that was received back by assessee against payments made towards 'bogus purchases' therefore, in the backdrop of declaration of 'bogus purchases' made by the assessee, a separate addition as regards application of the amount involved would not be justified.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
IN THE ITAT, MUMBAI BENCH
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