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Facts
The assessee filed an appeal against the order of the CIT(A)-NFAC, Delhi, sustaining an addition of Rs. 10,25,44,500/- under Section 69C of the Income-tax Act, 1961. The appeal was decided ex parte as the assessee did not appear. The Revenue contended that the assessee was non-cooperative and the addition was justified.
Held
The Tribunal noted that the lower authorities did not question the source of the assessee's withdrawals. Given that the addition was based on unexplained expenditure and the source was identified as withdrawals, the Tribunal found merit in the assessee's appeal.
Key Issues
Whether the addition under Section 69C for unexplained expenditure is sustainable when the source of funds is established as withdrawals.
Sections Cited
144, 69C
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Income Tax Appellate Tribunal, AGRA BENCH, AGRA
Before: SHRI SATBEER SINGH GODARA & SHRI MANOJ KUMAR AGGARWAL
ORDER
Per Satbeer Singh Godara, Judicial Member:
This assessee’s appeal for assessment year 2018-19, arises against the Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre [in short, the “CIT(A)-NFAC”],Delhi’s DIN and order no. ITBA/NFAC/S/250/2023-24/1060429517(1) dated 02.02.2024, involving proceedings under section 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Case called twice. None appears at the assessee’s behest. We, accordingly, proceed ex parte against the assessee.
This assessee’s appeal raises following substantive grounds :
“1 That under the facts and circumstances of the case and in law the Ld CIT(Appeals), NFAC (National Faceless Appeal Centre), Delhi has grossly erred in sustaining the addition of Rs. 102544500/made by the National e-Assessment Centre on account of unexplained expenditure under Section 69C of the Act 2 That while sustaining the impugned addition Ld CIT(Appeals), NFAC, Delhi has also erred in law in ignoring the peculiar facts & circumstances of the case and submitted submission & supporting documents and honest & bonafide explanation by the assessee. 3 That while sustaining the impugned addition Ld CIT(Appeals), NFAC, Delhi has also failed to give proper and reasonable opportunity to the appellant thereby violation the principles of natural justice and condition and procedure prescribed under the statute.”
Learned Sr. DR vehemently submits during the course of hearing that since the assessee has all along been non-cooperative, both the lower authorities have rightly added his section 69C unexplained expenditure disallowance amounting to Rs.10,25,44,500/- forming subject matter of adjudication before us.
It is in this backdrop that we proceed to examine the merits of the impugned addition herein. Learned Sr. DR very meticulously pin pointed to the fact that the cash withdrawals are not proportionate to the gross receipts declared in the return of income. A clinching fact which emerges from the case file is that even the lower authorities have nowhere questioned the source of assessee’s withdrawals for making section 69C unexplained expenditure disallowance. That being the case, we are of 2 | P a g e the considered view that the impugned addition deserves to be deleted once the source of deposit is nothing but withdrawals only. Ordered accordingly.
This assessee’s appeal is allowed.
Order pronounced in the open court on 17.02.2025
Sd/- Sd/- (MANOJ KUMAR AGGARWAL) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 17.02.2025 *aks/Subodh Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra
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