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2014 (2) TMI 811 - ITAT HYDERABADAddition made u/s 40A(3) of the Act – Payments made to the agriculturists - Purchase of agricultural lands – Whether the payments are covered by the exceptions mentioned in Rule 6DD of the IT Rules – Held that:- There is absolutely no merits in the challenge made as to the validity of section 40A(3) of the Act by mere deletion of sub clauses (1) and (2) of rule 6DD(j) - The provision is perfectly valid and the deletion of sub clauses (1) and (2) of rule 6DD(j) is only a step forward in the achievement of the avowed object envisaged u/s 40A(3) of the Act - the only exception that the Assessee can claim is when payments are required to be made on days when the Banks were closed on account of holidays or strike - Transactions after the banking hours in the course of regular business will not fall within this exception - the payment is not required to be made when the banks are closed i.e. after banking hours - the purpose of the disallowance u/s 40A (3) is to dissuade transactions by cash - no banking facility is available where the properties were purchased by Assessee - there was no choice for the assessee except to make the payments in cash due to exceptional or unavoidable circumstances as provided under Rule 6DD – thus, the order of CIT(A) set aside and the addition made u/s 40A(3) of the Act set aside. Addition made u/s 68 of the Act – Unexplained credits – Held that:- Mere guess work is not possible while framing assessment without any proper material - The Assessing Officer shall have the basis for assuming the unexplained credit in the case of the assessee and it is not possible to assess the income of the assessee in the absence of any evidence on arbitrary basis - The unsubstantiated material found in the pendrive cannot be considered in the hands of the assessee as a conclusive evidence so as to make additions towards unexplained credit – Relying upon CBI Vs. V.C. Shukla [1998 (3) TMI 675 - SUPREME COURT] - file containing loose sheets of paper are not books and entries therein are not admissible u/s 34 of the Evidence Act, 1872 - this is not substantiated by any corroborative evidence to establish that the assessee is involved in this transaction, so as to make addition in the hands of the assessee - in the absence of any corroborative evidence or material to establish that the entry is pertaining to Assessee, the order of CIT(A) set aside – Decided in favour of Assessee.
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