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REGARDING NATURE OF EXPENDITURE.

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This query is : Resolved

Suresh S. Tejwani (Querist)

20 January 2025 UNEXPLAINED EXPENDITURE IS DIFFRENT FROM UNACCOUNTED EXPENDITURE? CAN CIT REVISE ORDER OF 147 UNDER SECTION 263 BY PROVISION OF UNEXPLAINED EXPENDITURE U/S 69C IF SUCH EXPENDITURE IS SHOWN IN BOOKS OF ACCOUNTS?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

22 January 2025 In cases where unexplained expenditure is recorded in the books of accounts, the CIT's ability to invoke Section 263 may be limited. If such expenditures are documented and explained satisfactorily during the original assessment, the CIT may not have grounds to revise under Section 263 simply because they disagree with the AO's conclusions. The courts have held that if the AO has conducted a proper inquiry and reached a conclusion based on that inquiry, the CIT cannot override this decision without new adverse evidence.

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