RAHOOL N KANAL,MUMBAI vs. ACIT CENTRAL CIRCLE 5(4) , MUMBAI

In the instant case, the Assessing Officer (AO) made the addition of Rs. 4,00,000/- on account of unexplained expenditure incurred u/s. 69C of the Act being expenditure of Rs. 2,00,000/- per foreign trip from Mumbaii. It appears from the assessment order that the assessee has provided general reply but has not provided any documentary evidences or source of money by which the travel expenses have been incurred, as observed by the AO. However, from the paper book filed, it appears as claimed by the assessee that the assessee before the authorities below has filed various documents such as copy of passport, copy of personal bank account statement highlighting withdrawals during the relevant year, copy of explanation filed before the AO, copy of submission filed before the Ld. Commissioner, copy of ticket/invoice for Dubai trip undertaken in FY 2022-23 (Rs. 62,928/-), etc. From invoices dated 30.05.2022 and 02.06.2022, it appears that the assessee has spent Rs. 6,750/- on dated 02.06.2022 as VISA booking charges and Rs. 35,178/- on dated 30.05.2022 as aviation booking charges. Admittedly, the assessee failed to file all the relevant documents in support of its claim. However, considering the peculiar facts and circumstances, as it is not in denial by the authorities below that the assessee travelled foreign country twice and therefore, the expenditure incurred reasonably to the extent of Rs. 1,00,000/- per trip cannot be ruled out and thus, as the parties have also agreed to, this Court for the ends of litigation and substantial justice, is inclined to restrict the addition made by the AO to the extent of Rs. 2,00,000/-only. Consequently, the addition is restricted to the tune of Rs. 2,00,000/- as against the addition of Rs. 4,00,000/- made by the AO and affirmed by the Ld. Commissioner u/s. 69C of the Act. Rahool N Kanal

In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open court on 27.11.2025