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2013 (12) TMI 444 - AT - Income TaxValidity of proceedings u/s 143(3) - Held that:- The notice u/s 143(2) was issued on 9-9-2009 i.e. beyond one year from the date of filing of the return - The assessee has participated in the assessment proceedings and fully cooperated for completion of the assessment without raising any objection with regard to belated issuance of notice u/s 143(2) - Section 292 BB of the Act was brought to the statute by the Finance Act, 2008 w.e.f. 1-4-2008 - It is precluded u/s 292BB to raise such an issue after completion of the assessment proceedings before the appellate forum - The provisions of section 292BB shall be applicable to all the pending proceedings as on 1-4-2008 Following M/s Navayuga Spatial Technologies Pvt. Ltd. Vs DCIT [2013 (12) TMI 445 - ITAT HYDERABAD] - The mistake on account of belated service of notice is a curable mistake and the provision u/s 292BB is applicable to all the pending proceedings irrespective of the assessment years to which they relate Decided against assessee. Agricultural income Held that:- The assessee has failed to produce any evidence in support of its claim that the land sold was agricultural land - There were no other details with regard to the extent and nature of land sold and whether any agricultural activity was carried on those lands by the assessee or not The case shall be decided in accordance with the guidelines laid down by the Supreme Court in Sarifabibi Mohamed Ibrahim vs. CIT [1993 (9) TMI 10 - SUPREME Court] - The issue was restored for fresh adjudication. Disallowance of expenses Land development expenses, payment of salary, survey expenses, postage and telegram, staff welfare, office maintenance, printing and stationery etc. - Held that:- The assessee has not produced any evidence such as vouchers and bills or any other material in support of the expenses claimed - The disallowance made by the AO under the aforesaid head appears to be on higher side All the claim of expenses cannot be accepted It is justified to disallow the aforesaid expenses to an aggregate amount of Rs.10 lakhs Partly allowed in favour of expenses. Difference in cash book and cash balance Held that:- The AO has simply made the addition without making a proper enquiry to find out whether the entries indicated actual receipt of the amount or not - When pass book numbers have been mentioned against the entries, the AO should have called for pass books for cross verification. The CIT (A) has also not dealt with this issue in a proper manner - The issue was restored for fresh adjudication. Agricultural Income Held that:- The assessee did not produce any evidences with regard to the agricultural income earned nor any bills or vouchers are produced with regard to the expenses incurred towards earning of agricultural income - The assessee has claimed land development expenses but no details are available on record as to for development of which land, these expenses have been incurred by the assessee - The land sold were scattered over different places - The CIT (A) has failed to examine whether the agricultural income shown by the assessee will be the expected income from cultivation of 67 acres of land or not - It has to be ascertained that as on the date of sale whether the lands in question were put to agricultural use or not - Whether an agriculturist would have purchased the land for agricultural purposes at the price at which the land was sold - Whether the assessee would have ever sold the land valuing it as a property yielding agricultural produce on the basis of its yield - These aspects have not at all been examined either by the AO or by the CIT (A) while coming to their respective conclusions - The issue was restored for fresh adjudication. Difference in sundry debtors Held that:- Any discrepancy by itself cannot be a ground for addition without proving the fact that such discrepancy has resulted in an undisclosed income - As observed by the CIT (A), the AO has not alleged that there are any unexplained credits on this account Decided against Revenue. Addition on adhoc basis Possibility of unregistered transactions Held that:- The AO himself was not certain whether the assessee in fact has made unregistered transaction therefore he has used the word might have - When the AO is accepting almost 90% of the transaction It is not justified on his part to make a disallowance of Rs.10 lakhs on pure conjectures and surmises - Decided against Revenue. Undisclosed investment Held that:- The investment was made from available source as per the books of accounts and nothing was from outside the books - The assessee has also demonstrated that the payment was made to M/s Kinnera Constructions through account payee cheque - Since the investment has been made out of accounted for money, addition made by the AO was without any basis Decided against Revenue.
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