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2014 (11) TMI 835 - AT - Income TaxAddition out of land development expenses Held that:- The assessee had produced complete books of account before the AO - Details of land development expenses incurred were even produced before the CIT(A) - No substantiating evidence by way of bills or vouchers has been submitted either during the assessment proceedings or during the appellate proceedings to justify this claim of expenditure - this addition is not warranted because it is beyond the scope of provision of section 153A of the Act because this expenditure had been claimed even in the original return and was rightly allowed - The assessee did not get this work done through any sub-contractor - Therefore, no question of deducting any TDS - there is no specific objection made by the AO regarding any particular expenditure - The AO has accepted the expenditure in principle and there is no reason for making adhoc disallowance of 50% expenditure claimed by the assessee the addition is to be set aside Decided in favour of assessee. Unexplained investments - Purchase of residential plot in Balaji Nagar Yojna Held that:- As per the sale deed, investment only to the extent of ₹ 1,26,000/- is found to be incurred as investment in purchase of house and beyond that there is no evidence - The assessee claimed that the above investment of ₹ 1,26,000/- was made by the assessee, though the same was not appearing in the balance sheet but it is submitted that no addition can be made as the investment in the plot was made out of savings - The DLC value of the land could not be adopted for the purposes of considering the investment in the land - There is no provision like 50C for considering the sale consideration in section 69/69A - The assessee has claimed that this investment is out of her past savings, although there is no evidence the order of the CIT(A) is upheld Decided against revenue. Addition made u/s 40A(3) deleted - purchase of agricultural land Held that:- The payment to agriculturists were made under circumstances which are excluded under the provisions of Rules - The agricultural land cannot be converted to stock in trade until permission is obtained and the provisions of section 40A(3) of the Act cannot be invoked - Principles of section 40A(3) of the Act cannot be invoked in respect of agricultural land relying upon [1960 (9) TMI 11 - SUPREME Court] the addition is set aside Decided in favour of assessee.
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