| The Tax Publishers2020 TaxPub(DT) 3479 (Bang-Trib) INCOME TAX ACT, 1961
Section 69
Where assessee offered an additional income to take care of shortcomings, if any, the AO was not justified in making separate disallowance out of the expenses claimed by the assessee and hence, the disallowance of 20% of expenses as made by the AO was liable to be deleted.
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Income from undisclosed sources - Addition under section 69 - Unexplained expenditure - Assessee failed to submit details like nature of expenses, supporting bills or vouchers, details of purchases, etc.
A search and seizure operation was carried out under section 132 in case of assessee-firm. In the search proceedings, the assessee offered an additional income and it was submitted that the said surrender of income was made to overcome shortcomings, if any. During assessment proceedings, AO noted that the assessee claimed expenses and accordingly, he asked the assessee to submit details like nature of expenses, supporting bills or vouchers, details of purchases, etc. Since the assessee did not furnish the details, the AO disallowed 20% of the expenses by treating them as unexplained. Held: It was undisputed that the additional income was offered by assessee to cover up shortcomings, if any. Further, the additional income was less than the disallowance of expenses as made by the AO and therefore, the said disallowance might be telescoped against the amount surrendered by the assessee. Accordingly, there was no necessity to make separate disallowance out of the expenses claimed by the assessee and hence, the AO was directed to delete the said disallowance.
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2010-11
INCOME TAX ACT, 1961
Section
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