The Commissioner Of Income Tax v. M/S. South Seas Distilleries

(-1-) IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 938 OF 2007 The Commissioner of Income Tax ... Appellant The Commissioner of Income Tax ... Appellant Versus M/s. South Seas Distilleries & Breweries Pvt. Ltd. ... Respondent Mr.P.S. Sahadevan for the Appellant. Mr. Pankaj R. Toprani for Respondent. CORAM: F.I.REBELLO&R.S.MOHITE, JJ.DATED: 24TH MARCH, 2009 CORAM: F.I. R.S.MOHITE, JJ. DATED: 24TH MARCH, 2009 P.C.: P.C.: . The revenue is in appeal on several questions. This appeal can be considered in terms of the following question : "(a) Whether on the facts and in the circumstances of the case the Hon’ble ITAT is right in upholding the order of CIT(A) and thereby deleting the addition of Rs.7,24,277/- as unexplained expenditure u/s. 69C of the Income Tax Act, 1961 made by the Assessing Officer on the basis of the documents found during course of search and seizure action?" . The learned CIT (A) and ITAT proceeded on a (-2-) footing that the amount as added is unexplained income under Section 69C than the said amount has to be allowed as deduction for computing the taxable profits. . Proviso to Section 69C reads as under : "Provided that, notwithstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income." . The proviso was inserted by Finance (No. 2) Act of 1998 with effect from 1.4.1999. The appeal was in respect of the issue for the block period of 1991-92 to 2001-2002. We are therefore, of the opinion that in the appeals in respect of the assessment years after the proviso had been inserted, the tribunal ought to have noted the said proviso which has not been done. Considering the above, the impugned order dated 11.2.2007 is set aside. The matter remanded back to the tribunal to pass further orders according to law and taking into consideration proviso to section 69C of the Act. Appeal disposed of accordingly. (-3-) (R.S.MOHITE, J.) (F.I.REBELLO, J.) (R.S.MOHITE, J.) (F.I.REBELLO, J.) (R.S.MOHITE, J.) (F.I.REBELLO, J.)