Law:

Section:

Section 69C of the Income-tax Act, 1961 - Unexplained expenditure (Bogus Purchases) - Assessment years 1999-2000 - Assessee was trader in edible oils on semi-whole sale basis - Survey proceedings under section 133 carried out in assessee's proprietary concern - It was a found that assessee purchased edible oils of Rs. 2 crore from 5 different parties - Assessing Officer opined that assessee failed to discharge onus of proving genuineness of aforesaid purchase; he, thus, made addition of 25 per cent of total purchases taking it as 'unexplained purchase' - Commissioner (Appeals) reduced addition to 20 per cent on account of unexplained purchases - Tribunal further reduced said disallowance to 10 per cent of purchases relying on decision of coordinate bench of Tribunal - Even though order passed by Tribunal was non-speaking, yet same was based on Supreme Court decision - Moreover, G.P. rate shown by assessee in relevant year was better than rate disclosed in subsequent years - Whether impugned order of Tribunal did not require any interference - Held, yes [Para 8] [In favour of assessee] FACTS â–  The Assessee was trader in edible oils on semi-whole sale basis. The survey proceedings under section 133 carried out in assessee's proprietary concern. It was found that the assessee purchased edible oils of Rs. 2 crore from 5 different parties. The Assessing Officer opined that the assessee failed to discharge onus of proving genuineness of the aforesaid purchase. He thus made addition of 25 per cent of total purchases taking it as unexplained purchases. â–  The Commissioner (Appeals) reduced the addition to 20 per cent on account of unexplained purchases. â–  The Tribunal further reduced said disallowance to 10 per cent of the alleged purchase. â–  On revenue's appeal: HELD â–  The Commissioner (Appeals) on appeal restricted the disallowance to 20 per cent of the unexplained purchase by a speaking and reasoned order and even distinguishing the decision of the Appellate Tribunal in the case of Vijay Proteins Ltd v. Asstt. CIT [1996] 58 ITD 428 (Ahd.). Therefore, the Tribunal was required to consider the legality and validity of the order…