Section 28, 37, 69C of Income Tax Act, 1961— The AO in the instant case has treated the purchases from the 2 parties namely Impex Sales Corporation and Sankalp Traders amounting to Rs. 11,35,011/-respectively as unexplained expenses under section 69C of the Act. The primary reason for treating such purchases as unexplained expenses that the registration certificate under VAT/CST were cancelled by the sales tax department effectively from the financial year 2011-12. The informations about the cancellation of these certificates were obtained by the AO from the website of the sale tax department.

Held that— In view of the above, we hold that the assessee is eligible for the deduction of the impugned loss as incurred in the course of the business but not as bad debts under the provisions of section 36(1)(vii) of the Act.

we set aside the order of the Ld. CIT(A) and direct the AO to delete the addition made by him.[TRUSHAR PARIMAL SHAH VERSUS THE INCOME TAX OFFICER WARD-1 (3) BHAVNAGAR] [2019] 18 ITCD Online (17) [ ITAT AHMEDABAD]