TMI Blog2014 (4) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther appeal against the order of the Tribunal dated 23.5.2012 Ground for the A.Y. 2006-07 On the facts and in the circumstances of the case and in law the learned CIT(A) erred in deleting the addition made by the A.O. on account of deemed dividend u/s 2(22)(e) amounting to Rs. 22,55,000 vide order u/s 143(3) r.w. section 263 dated 26.12.2011 without appreciating the fact that the department has preferred further appeal against the order of the Tribunal dated 23.5.2012. 2. Before us, as admitted by both the parties, the aforesaid appeals are arising out of the order passed under section 143(3) r/w section 263, in pursuance of the order dated 14th March 2011, passed under section 263, by the learned Commissioner. Now, the said order, which was passed by the learned Commissioner under section 263, has been cancelled by the Tribunal, Mumbai Bench, vide its order dated 23rd May 2012, for both the years i.e., assessment year 2005-06 and 2006-07. Thus, the present appeals have been rendered infructuous. This fact has also been noted by the learned Commissioner (Appeals) in Para-3.3, which reads as under:- I have considered the arguments of the ld. A.R. I agree with Ld. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Ld.CIT(A) has erred in deleting the addition of Rs.9,54,511/- made on account of material, transport and labour charges even though the assessee failed to produce bills/vouchers in respect of these expenses for verification during the course of assessment proceedings. 5. On the facts in the circumstances of the case and in law, the Ld.CIT(A) has erred in restricting the addition of Rs.6,58,860/- made on account of traveling expenses to Rs.1,31,772/- even though the expenses incurred for travel to Ahmedabad, Rajasthan Bangalore have no connection with the projects in Mumbai and that the assessee failed to substantiate the link between the traveling expenses and its business. 5. It has been admitted before us that insofar as the aforesaid ground no.1, 2 and 3 are concerned, the same are covered by the order of the Tribunal in assessee s own case in ITA no.2095/Mum./ 2010, for the assessment year 2006-07 and ITA no.5048/Mum./2010, for the assessment year 2007-08, wherein the issue arising out of the aforesaid grounds have been decided in favour of the assessee and against the Revenue. 6. Brief facts, qua the aforesaid issue, as noted by the learned Commissioner ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no documentary evidence with respect to the sale of car parking area except the document no.15 of the impounded documents with respect to flat no.C-38, wherein also Rs. 50,000 are mentioned against car parking. Therefore, there is no basis for making addition of Rs. 1,00,000 for each flat for car parking. The A.O. 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 A.O. at any stage of proceedings. Therefore, it cannot be presumed that all the flats were sold by the assessee through the real estate agent and involved brokerage charges. 16. In view of the above discussion and facts and circumstances of the case, we are of the view that when the statements u/s 133A were recorded at back of the assessee and were subsequently retracted by the witnesses have o evidentiary value to the extent of contents whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he arguments of the ld. A.R. The only reason to disallow 2% of expenses is that no bills / vouchers were produced for verification. It is noted that vide reply dated 4/11/2011 the assessee had furnished the ledger a/c material purchased along with the ledger a/c of all parties from whom the material was purchased but no specific discrepancy could be pointed out by the A.O. From the details of ledger a/c of material purchases it is seen that the names of parties, bill no and dates and the item purchased are mentioned. In case of civil construction nit is difficult to maintain itemwise stock register for each item separately considering various items located as various sites. Hence the mere fact that item wise breakup was not separately maintained cannot be a reason to disallow purchases on adhoc basis without finding any other defect more so when the narration in the ledger a/ c of material purchases, the names of parties, bill no and dates and the item purchased are duly mentioned. From the ledger a/ c of parties for expenses it is noted that the payments have been mostly by cheques and in case of labour payments to contractors, TDS has also been made. Since the accounts of assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance which the Assessing Officer has done on a very reasonable basis. 15. The learned Counsel for the assessee, on the other hand, strongly relied upon the detail findings, as given by the learned Commissioner (Appeals). 16. After carefully considering the rival submissions and also on a perusal of the order of the learned Commissioner (Appeals), we find that the learned Commissioner (Appeals) 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. It has been further noted by him that most of the payments have been made through cheques and in case of labour payments to the contractors, TDS has also been deducted. The Assessing Officer 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. Besides this, the learned Commissioner (Appeals) 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, therefore, ..... 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