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2014 (3) TMI 322 - AT - Income TaxDisallowance of business expenditure – Held that:- The finding of the CIT(A) is that the expenditure claimed by the assessee relates to disputes raised by the assessee with regard to the amounts due on the contracts executed - Such expenditure as long as it is in connection with the business activity of the assessee, has to be allowed, as held by the CIT(A), irrespective of whether the assessee is actually continuing with the taking up of new contracts or executing them regularly – thus, there was no infirmity in the order of the CIT(A) – Decided against Revenue. Unexplained cash deposits in the bank accounts – Held that:- The CIT(A) after analyzing the receipts and payments account and on verification from computation statement filed with the return of income, which were found to be supported by entries in the cash book, came to the conclusion that there was no warrant for any addition on account of deposits in the bank accounts - out of total deposits of Rs.1,29,500, which was wrongly taken as Rs.10,29,500 by the Assessing Officer, deposit of Rs.99,500 in ABN Amro Bank was through cheques and not cash as evident from the bank statement – revenue could not brought anything contrary – thus, the order of the CIT(A) upheld – Decided against Revenue. Addition made on account of investment in shares – Held that:- The reason for making the impugned addition is that the investment in question does not appear in the balance sheet and the MOU does not appear to be genuine - the so called investment in shares have been derived by the assessee by virtue of the transaction in terms of the MOU, and not on account of any cash outflow from the assessee's end - In the absence of any fund flow in the process of acquiring shares, the question of any unexplained investment does not arise - When the acquisition of shares by the assessee is not disputed, one has to accept the genuineness of the MOU, since allotment of shares was result of the arrangement in terms of the MOU only – the order of the CIT(A) upheld – Decided against Revenue. Addition made on treating part of the agricultural income disclosed by the assessee treating as income from other sources – Held that:- There was no infirmity in the reasoning given by the CIT(A) for accepting the agricultural income claimed by the assessee - The factum of agricultural activity is proved by the proved acts of supply of raw-material to M/s. Yeturi Bio- tech P. Ltd. - Bills for the supply of such raw-material to the said company are also produced in the paper-book filed - it is Aloe leaves which is claimed to be the agricultural produce of the assessee - It is the claim of the assessee that M/s. Yeturi Bio-tech P. Ltd., has been floated by the family of the assessee and it is in primitive stages of its business activity – thus, it is quite possible that the assessee is actively concentrating on agricultural activity and growth of Aloe leaves in the yeas under consideration, since it is the raw material for the company floated – Decided against Revenue.
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