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2014 (8) TMI 243 - ITAT HYDERABADAdvances received as unproved credits – Held that:- CIT(A) rightly was of the view that without bringing any cogent material on record, the AO could not have made the addition under challenge - There is nothing on record that the AO wanted the appellant to produce the prospective purchasers for his examination, so as to adhere to the principles of natural justice - There was no reason to interfere with the order of the CIT(A) as nothing was brought on record that the amount received as advance for sale of plot is in fact, unsecured loan - There is confirmation on record and the advances could have been settled at the time of sale of plots in the business in which assessee is indulging – decided against Revenue. Gifts received from brother-in-law through others – Held that:- CIT(A) is rightly was of the view that the assessee has explained that the donee has given post -dated cheques to his father, who is a small time businessman- As advised by his son, he has sent one of his employees to withdraw the money by submitting post-dated cheques and that's why the difference in signatures, which explanation was not accepted by the AO during the assessment proceedings - Except for not accepting the explanation given by the appellant, no other cogent material has been brought on record by the AO in making the impugned addition - there was confirmation from the assessee’s brother-in-law of the various amounts given to him - Since the source and the identity were established, there is no need to treat the amount as unexplained cash credit – Decided against revenue. Restriction of development expenses – Held that:- There was no reason to interfere with the order of the CIT(A) - there is no basis for disallowing the entire development expenditure when assessee is in the business of plot development and sale thereafter - CIT(A) restricted the amount to 10% of the expenses incurred - Even though, the disallowance of expenditure is made under section 37(1) nothing was brought on record by Revenue why the entire amount should be disallowed – thus, the order of the CIT(A) is upheld – Decided against Revenue. Commission on sales to representatives – Held that:- There was no reason to interfere with the order of the CIT(A) - Payment of commission is an incidental expenditure in the business of real estate - Without even giving show cause notice or asking for the details AO disallowed the expenditure without any reason – Decided against Revenue. Unexplained cash credit – Held that:- There was no reason to consider the Revenue ground as the AO and Ld. CIT should have accepted the mistake committed by the AO in making addition - Some of the amounts were already treated as income like gifts received from brother-in-law - there is certainly double addition by the AO - Just because assessee transferred funds from his business account to personal account, the same does not become unexplained cash credit – Decided against Revenue.
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