VIGNESWARA ENTERPRISES ,CHENNAI vs. ITO NCW 10(6), CHENNAI

Aforesaid appeal by assessee for Assessment Year (AY) 2018-19 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 27-12-2022 in the matter of an assessment framed by the Ld. AO u/s 143(3) r.w.s 143(3A) & 143(3B) of the Act on 08-04-2021. In the present appeal, the assessee is aggrieved by confirmation of addition of Rs.21.38 Lacs u/s.69C r.w.s 115BBE of the Act. Having heard rival submissions and upon perusal of case records, the appeal is disposed- off as under.

The assessee being resident firm is stated to be engaged in real estate development. During assessment proceedings, it transpired that the assessee purchased immovable properties for total value of Rs.559.99 Lacs. Upon perusal of details as furnished by the assessee, Ld. AO noted that the properties for Rs.21.38 Lacs was purchased during AY 2015-16 (on 01-12-2014) whereas the assessee included the same in the purchase of this year. The purchases were inflated to that extent. Accordingly, the purchases as claimed in this year was disallowed and added to the income of the assessee as unexplained expenditure u/s.69C r.w.s 115BBE of the Act. The Ld. CIT(A) confirmed the same as prior period expenses since the assessee could not establish the source of these purchases. Aggrieved, the assessee is in further appeal before us.

The Ld. AR has stated that the plots under consideration were purchased during AY 2014-15 but the same were omitted to be accounted for in the books of accounts. The Ld. AR also submitted that the payment for purchases have been made out of regular books of accounts. Considering the same, we restore this issue back to the file of Ld. AO with a direction to the assessee to substantiate its case. All the issues are kept open.