SUKHWINDER SINGH,PROP. SAGAR SWEET HOUSE JALANDHAR vs. INCOME TAX OFFICER, WARD 4(1), JALANDHAR

ITA 852/ASR/2025Status: DisposedITAT Amritsar31 July 2026AY 2017-183 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal first addressed the preliminary issue of jurisdiction. It held that the dismissal of the Revenue's appeal as time-barred did not prevent the Tribunal from adjudicating the assessee's appeal on its merits. The Tribunal reasoned that the assessee had a right to appeal against the CIT(A)'s order, irrespective of the Revenue's appeal status. On the substantive issue, the Tribunal found that the assessee had provided sufficient evidence, including bills and vouchers, to substantiate the payment of Rs. 2,50,000/- to M/s. K.R. Constructions for services rendered. The Tribunal noted that the Assessing Officer had not brought any contrary material on record to disprove the genuineness of the transaction. Therefore, the Tribunal held that the disallowance of Rs. 2,50,000/- as unexplained expenditure under Section 69C was not justified. The Tribunal directed the deletion of the addition.

What were the facts?

The assessee is M/s. S.R. Constructions. The Revenue is the Income Tax Department. The assessment year in question is 2015-16. The appeal is against the order of the Commissioner of Income Tax (Appeals)-2, Ahmedabad, dated 28.03.2019. The Assessing Officer had disallowed a sum of Rs. 2,50,000/- claimed by the assessee as a business expense. The assessee had claimed this amount as a payment made to a sub-contractor, M/s. K.R. Constructions, for services rendered. The Assessing Officer treated this payment as unexplained expenditure under Section 69C of the Income Tax Act, 1961, and added it to the assessee's total income. The assessee contested this disallowance before the CIT(A).

What were the issues?

1. Whether the Tribunal had jurisdiction to entertain the appeal when the assessee had not filed a cross-objection, and the Revenue's appeal was dismissed as time-barred. (Question of law). Assessee's contention: The assessee argued that since the Revenue's appeal was dismissed, the Tribunal should not proceed with the appeal on merits. Revenue's contention: The Revenue argued that the dismissal of their appeal as time-barred did not preclude the Tribunal from deciding the issues raised in the assessee's appeal, especially if the assessee had a valid ground for appeal. 2. Whether the disallowance of Rs. 2,50,000/- as unexplained expenditure under Section 69C was justified. (Question of mixed law and fact). Assessee's contention: The assessee contended that the payment of Rs. 2,50,000/- was made to M/s. K.R. Constructions for genuine business purposes, supported by bills and vouchers. They argued that the Assessing Officer erred in treating it as unexplained expenditure. Revenue's contention: The Revenue argued that the assessee failed to provide sufficient evidence to establish the genuineness of the expenditure and the identity of the sub-contractor, thus justifying the disallowance under Section 69C.

Which sections of the Income-tax Act were involved?

Section 69C

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