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2021 (10) TMI 344 - ITAT DELHIAddition u/s 40A(3) - commission paid by the assessee @ 5% of contract work awarded by NOIDA - AO held that the application of 8% on the turnover appears to be excessive AND payments exceeding ₹ 20,000/- were made to a single party and the assessee has willfully bifurcated the payments to keep it within the threshold limit - HELD THAT:- AO has not brought anything on record to disallow 5% of the expenses. He has not determined even the head under which the expenses have been inflated or bogus. Even, in the case of payments made in cash, absolutely no enquiries have been conducted. Assessing Officer held that the assessee could not substantiate the discrepancies but did not mention anything as to what are all the discrepancies found. The mere allegations cannot be treated as evidences. The fundamental principle of justice requires the Assessing Officer to discover and collect evidence and confront the assessee before making any disallowance. In the instant case, there was no mention at all as to which of the expenses is bogus or inflated. In the instant case, we find no primary evidences or secondary evidences or even any probabilities brought out by the revenue to resort to disallowance of 5% expenses over and above 6.77% net profit disclosed by the assessee. Any disallowance made by the revenue without bringing any evidence on record is liable to be set aside. Appeal of the assessee is allowed.
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