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2012 (11) TMI 615 - AT - Income TaxDisallowance of expenditure for Assessment year 2007-08 - AO has made an adhoc disallowance of Rs.2,50,000 from the total expenditure of Rs.9,94,262/- claimed by the assessee as assessee is not able to verify expenses. It was contended by the learned AR that for the subsequent assessment year i.e.2008-09 the AO had accepted the expenditure claimed by the assessee and has only made a small disallowance of Rs.50,000/- from the expenditure claimed. Held that:- Considering the totality of facts and circumstances involved, ends of justice will be met if the disallowance is restricted to Rs.1 lakh only - this ground of the assessee is allowed in part. Unexplained Cash Deposit - Issue restored to the file of the AO who shall examine the cash deposits in the bank account of the assessee and make an enquiry to find out whether these represent towards LIC premiums paid by policy holders to the assessee for remitting the same to the LIC if he deposits in the saving account are reconciled then the assessee’s claim is to be accepted and, no addition can be made of the said amount u/s 68 of the Act. Levy of Interest- Being consequential to the final determination of income, the ground raised by the assessee has become infructuous and accordingly the same is dismissed as such - In the result, the appeal is treated as allowed in part for statistical purposes.
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