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2014 (5) TMI 352 - AT - Income TaxDisallowance u/s 40A(2)(b) of the Act – Legal and professional charges – Held that:- The Assessee has made payment to the proprietary concern of the father of one of the partner of the firm and thus the payment is to a person specified in s. 40A(2)(b) of the Act - CIT(A) has noted that that though Shri Vinodkant Sanghani is highly technically professionally qualified person but there is nothing on record to lead to the conclusion that Shri Vinodkant Shangani was qualified to deal with the tasks which has been claimed to have been handled by him - assessee has not placed any material on record to controvert the findings of AO and CIT(A) - assessee was asked to file evidence showing involvement of Shri Shangani in various activities to which, the Assessee vide letter dated 28th March 2014, submitted that it could not lay hand on any evidence as the matter was more than 10 years old – as the assessee has not substantiated the claim for expenses, there is no reason to interfere with the order of CIT(A) – Decided against Assessee. Disallowance of expenses u/s 35 of the Act – Expenses on scientific research - Whether the firm had not laid out any funds for acquisition of the capital asset – Held that:- Relying upon Commissioner of Income-Tax Versus Gujarat Aluminium Extrusions Pvt. Ltd. [2003 (7) TMI 65 - GUJARAT High Court] CIT(A) rightly was of the view that the expenditure has to be incurred in a relevant previous year - In the Remand Report, the AO reiterated that the major capital expenditure at Baroda was incurred on 30.03.2005 for purchasing building for R&D - it cannot be established by the assessee by way of evidences that the above premises were used for R & D purpose at this place acquired on 30.03.2005 – the capital expenditure cannot be considered as actually used for the above research and development activity - CIT(A) while upholding the disallowance of Rs 15 lacs has noted that property of 1700 sq ft owned by Shri Jayesh Sanghani was introduced as his contribution to the firm - introduction of capital contribution in the firm by the partner does not constitute expenditure – assessee has not placed any material on record to controvert the findings of CIT(A) – thus, there was no reason to interfere with the order of ClT(A) – Decided against Assessee.
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