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2013 (10) TMI 825 - AT - Income TaxAddition u/s 40A (3) – Cash payment made on purchase of land - Held that:- The CIT(A) failed to consider the submissions of the assessee that payment in cash was made through the agent for the purpose of buying of land - the payment was made to the agent who was required to make payment in cash for purchase of land on behalf of assessee is dealt with by the ld. CIT(A) - CIT(A) nowhere in his order has adverted to and decided this submission of the assessee - the decision of CIT(A) on this issue is not justified, the same is hereby set aside - this being legal issue, the same is restored back to the file of AO to verify the claim of the assessee that the payment was made to the agent for the purpose of buying the land and the person to whom the sale consideration was handed over in cash was acting as an agent to the assessee 0 The AO is directed to decide this issue afresh in the light of the provisions of Rule 6DD(k) of the IT Rules, 1962 – Decided in favour of Assessee. Disallowance of Expenses – Unaccounted Income Disclosed – Held that:- It cannot be said that these expenses were incurred in respect of this income declared by the assessee in the course of survey - This cannot also be inferred that the assessee in claiming any deduction in respect of amount which was declared by the assessee during the course of survey thus proviso to section 69-C of the Act is not applicable in respect of these expenses - it is also required to be examined regarding the source of these expenses because if these expenses are not recorded in the books of accounts and the same is already paid, then its source of payment requires explanation - the issue should go back to the file of AO for fresh decision - the order of the CIT(A) on this issue and restore this matter back to the file of AO. Addition as profit on sale of records – Unaccounted Expenditure – Held that:- No separate addition was made by the AO in this regard and no material facts had been brought on record by him in respect of actual sale of plots and profit - In the absence of any evidence having been brought on record by the AO regarding actual sale and actual profit, no such addition is justified - the observation of the AO that this amount might have been utilized for the purpose of incurring expenditure made out of books is on the basis of conjectures and surmises - the addition is not called for because no evidence has been brought on record by the AO regarding actual sale of plots - Decided in favour of Assessee. Enhancement made by CIT (A) – Held that:- The enhancement was made by the CIT (A) on this basis that the amount declared by the assessee in the course of survey was in respect of expenses incurred by the assessee out of undisclosed sources but in the books of accounts the assessee had not accounted for the expenses but the assessee has accounted for the income only and the same was shown as cash in hand which was used subsequently for other purposes - on this issue also, the matter requires re-examination - the basis of accounting for these expenses has to be examined because the same may be accounted for by debiting to some capital asset and in that situation, the enhancement is not justified – Decided in favour of Assessee.
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