1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.641 OF 2009 Aruna P. Patel ...Appellant V/s. The Commissioner of Income Tax – XVI ...Respondent. Mr.F.B. Andhyarujina, senior counsel with Ms.Aasifa Khan for the appellant. Mr.K.R. Chaudhary for the respondents. CORAM : V.C. DAGA & J.P. DEVADHAR, J. DATE : 23RD NOVEMBER 2009 P.C. : 1. Heard learned senior counsel for the appellant. 2. This appeal is directed against the order dated 18-11-2008 passed by the Income Tax Appellate Tribunal, D Bench, Mumbai, rejecting the appeal filed by the appellant for the reasons stated therein. The learned counsel appearing for the appellant canvassed that whether the additions made in the sum of Rs.28,19,045/- for the assessment year 1991 can be said to be within the sweep of Section 69C of the Act. According to him, if the purchases reflected in the books of account have been accepted and that there is no dispute of quantum, then the additions made on 2 account of deemed payment for purchases which were shown by the appellant as outstanding in the balance sheet would hardly be within the sweep of Section 69C of the Act. In other words, in the submission of the learned senior counsel, the question of invoking Section 69C does not arise since Section 69C deals with unexplained expenditures. 3. We were also taken through the orders of all the authorities below. All the authorities below including Tribunal have rejected the submissions advanced by the appellant. Entire order of the Tribunal revolves around finding of facts recorded based on appreciation of evidence, with which no fault can be found. The Tribunal in para 3 has specifically dealt with the issue by reasoned order. Needless to mention that even after remand, in the fresh assessment proceedings, the appellant did not file confirmation letters nor produced the creditors. The Assessing Officer made enquiries at the addresses given by the Appellant through the Inspector. None of the parties was found since they were non-existent. Under these circumstances, by no stretch of imagination it can be said that the facts and circumstances of the case were not taken into consideration by the Tribunal and that the impugned order was passed without application of mind. 4. All the facts and circumstances were taken into account by the Tribunal and that the impugned order passed is based upon proper appreciation of facts. In fact all the facts and circumstances were taken into account by the Tribunal. 5. So far as question of set off is concerned, the Tribunal has also 3 considered the said question in para 6.5 in the following words : “6.5 The other argument of the learned AR is that the deemed income under section 69C will be offset against the expenditure incurred and there would be no addition. This argument is also devoid of any merit. The argument will be valid when the unaccounted expenditure is found in isolation and is not relatable to any income found and therefore the expenditure will have to be allowed against the deemed income resulting into nil income in the pre-amendment period to which the case of the assessee relates. After amendment to section 69C w.e.f. 1.4.99, even this has been prohibited. In the present case, the expenditure on account of purchases is relatable to sales and has already been allowed by the Assessing Officer as deduction against the sales made. The addition under section 69C is on account of payment for purchases which had been found to be incurred from unexplained sources. Therefore, expenditure on purchases will not be available for setting off against the deemed income u/s.69C even in the pre-amendment period.” 6. Having seen the findings recorded on this count, no fault can be found with the same. The appeal is devoid of any merit and the same is, thus, dismissed with no order as to costs. (J.P. Devadhar, J.) (V.C. Daga, J.)