INCOME TAX ACT, 1961

Section 69

Income from undisclosed sources - Addition under section 69C - No evidence that assessee incurred expenditure -

Assessee firm engaged in construction of affordable housing had shown cost of construction in its balance sheet at Rs. 490 per square feet whereas the AO was of the view that construction cost should be at Rs. 1,253 per square feet. The view of the assessing officer was based on the Jantri rate issued by superintendent of the stamps Gandhinagar Gujarat suggesting the rate at Rs. 1,253 per square feet. Accordingly, AO held that assessee had shown less cost of construction in its books of accounts by Rs. 763 per square feet and made addition on account of unexplained expenditure under section 69C. Held: Provisions of section 69C are attracted in a situation where assessee has incurred an expense without recording the same in books of accounts. In the case there was no iota of evidence available before AO suggesting that the assessee incurred any expense which were not disclosed in books of accounts except value of Jantri determined by superintendent of stamps. Also, there was the survey operations carried out however, no details were found during survey operation suggesting that there was the expenses incurred by assessee outside the books of accounts. Accordingly, AO was not justified in making addition.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2012-13

INCOME TAX ACT, 1961

Section 80-IB

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