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2012 (7) TMI 370 - AT - Income TaxChallenge reopening of completed assessment u/s 147 - ad hoc dis allowances of expenses - Held that:- A.O. himself admitted in his order that the details of expenses has been filed but the log book was not filed by the assessee. Therefore, he disallowed 20% of the generator expenses. As the assessee has furnished details of general expense and repair and maintenance no such adhoc disallowance is warranted whereas in respect of generator expenses the assessee has failed to furnish relevant documents, log book and others, therefore, the A.O. has rightly disallowed 20% of the expenses. Addition on account of estimated business income - as per recognized accounting practice on actuaries – 6.5% of deposits mobilized by assessee forfeited - Held that:- Without bringing any material on record or without any discussion in the body of the order the AO has observed that there may be income of Rs.84,00,000/- on account of forfeiture of deposits - there is no question of forfeiture of any deposit and from the material available on record, it is seen that the company is repaying the depositors year after year - The AO has not discussed in his order that in what type of business and how there will be a business yield @ 6.5 times - against revenue. Addition i.e. making imaginary disallowances out of expenses of non existent business - Held that:- whatsoever has been given by the AO while disallowing admissible expenses on adhoc basis. The income has been estimated on imaginary basis which we have already deleted - in favour of assessee. Addition on account of rent received - Held that:- Addition of Rs.1,54,000/- by mentioning Rent as other income is not acceptable as no discussion has been made in the body of the order that how this rent income is other income. In fact, the assessee in its Profit & Loss account of the Hotel business had shown rental income of Rs.1,68,650/- and it seems that AO had treated the rental income of hotel as income from other sources. However, no finding has been given by the AO that how the rental income of hotel can be treated as income from other sources - in favour of assessee.
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