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2014 (4) TMI 354 - AT - Income TaxAddition made on account of unaccounted cash receipts – Cash receipts of brokerage – Sale of car parking charges - Held that:- The decision in M/s. Sai Shiv Developers [2014 (4) TMI 153 - ITAT MUMBAI] followed – Without any evidence in the year for receipt of on-money the addition cannot be sustained –there is no documentary evidence with respect to the sale of car parking area except the document no.15 of the documents - there is no basis for making addition for each flat for car parking - The AO had not made any inquiry or verification to examine the facts regarding the rate of sale, area, on money payment of brokerage charges and car parking charges from any of the available sources including the buyers of flats as none of the buyers of the flats was examined by the department to verify the involvement of on-money payment and other charges as alleged by the revenue - Even the understatement of area is not examined by the AO at any stage of proceedings - it cannot be presumed that all the flats were sold by the assessee through the real estate agent and involved brokerage charges. When the statements u/s 133A were recorded at back of the assessee and were subsequently retracted by the witnesses have no evidentiary value to the extent of contents whichever corroborated by documents impounded during the survey proceedings – thus, no addition is warranted with regard to the area, parking charges and brokerage - The addition regarding rate is sustainable only to the extent of rates mentioned in the documents – thus, the order of the CIT(A) upheld – Decided against Revenue. Ad-hoc Deletion made - Material, transport and labour charges – Held that:- The CIT(A) has analysed the ledger account of material purchases wherein the entire details like name of the parties, bill number, date and item purchases were mentioned - most of the payments have been made through cheques and in case of labour payments to the contractors, TDS has also been deducted - The AO has neither identified any specific details nor asked the assessee to produce specific bills or vouchers for any particular items of purchase and in the absence of such exercise being done by the Assessing Officer, no ad-hoc disallowance can be made – CIT(A) has also analysed the working of the profit to highlight the fact that the assessee had shown a high margin of profit in this year - the assessee’s purchases cannot be doubted on ad-hoc basis – the items of expenditures are direct expenses and once the high margin of net profit has been accepted, then such a disallowance will go to enhance the profit by further percentage – thus, there is no reason to interfere in the findings of the CIT(A) - when all the details of direct expenses have been maintained and no discrepancies therein have been found, then any kind of estimate or ad-hoc disallowance should not have been made – Decided against Revenue. Deletion of travelling expenses – Held that:- CIT(A) was of the view that the travel to Rajasthan may be justified in connection with purchase of marbles but no specific arguments to justify the travel to other places like Ahmadabad and Bangalore has been given - Considering the fact that FBT has also been paid and visits to Rajasthan do appear to be for business purposes, entire disallowance of travelling expenses is highly excessive - the reasoning given by the CIT(A) for restricting the disallowance of expenditure @ 20% is quite reasonable and no further disallowance is called for – Decided against Revenue.
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