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2017 (8) TMI 948 - AT - Income TaxDisallowance u/s 40A(3) - cash purchases - stock in trade of land - business expediency - disallowing purchases on the one hand, addition into stock on the other hand - Held that:- AO as well as Ld. CIT(A) has not denied the genuineness and bonafide transactions made by the assessee but has added the payment made for the purchase of the land to the income of the assessee which is not sustainable in the eyes of law. Further find that it was accepted by the authorities below that the purchases as appearing in the balance sheet as a closing stock and on the other hand addition of payment made for purchase of land is bad at law. The assessee has shown the short term loss in the computation of income which has been carried forward in the subsequent year. However authorities below failed to give the credit against income of the assessee neither they have carried forward the same in spite of full details on record and as well as the ITO called the information u/ s 131(6) from the respective companies, the act of the authorities below is erroneous and unwarranted and the credit of the short term loss against the income of the assessee need to be allowed.
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