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2014 (7) TMI 126 - AT - Income TaxLow gross profit, un-vouched expenses, unexplained expenses and valuation of stock Held that:- The AO has not specifically rejected the books of accounts or made any adverse comments - there is a finding by the AO that the vouchers produced by the assessee in support of the expenditure claimed are mostly self-made vouchers - The CIT (A) has restricted the disallowance to 10 lakh by observing that the AO has rejected the books of accounts and the expenditure claimed by the assessee are not supported by bills and vouchers - considering the claim of the assessee that all the expenditures are supported by genuine bills and vouchers and books of accounts have been correctly maintained which can be proved by the assessee, the matter is required to be remitted back to the AO for verification Decided in favour of Assessee. Addition u/s 40A(3) of the Act Held that:- The AO has clubbed together payments made on 8th Aril, 2008 and 9th April, 2008 to treat it as single payment of ₹ 20,500 so as to bring it within the purview of section 40A(3) - When other instances of clubbing of payments made on successive days are also filed from the ledger extracts - the AO cannot club together payments made on two different dates as one payment so as to bring within the purview of section 40A(3) of the Act - the claim of the assessee is required to be verified which has not been properly done either by the AO or by the CIT (A) thus, the matter is to be remitted back to the AO for examination Decided in favour of Assessee. Restriction of deduction u/s 80G of the Act Held that:- The receipt is in the name of two persons i.e., the assessee and one Sri Kedia - the contention of the assessee is that the cheque for ₹ 1 lakh was entirely paid by the assessee from his bank account - reference to the order passed u/s 80G, a copy of which reveals that the institution to which donation was paid has been registered u/s 80G of the Act - if the assessee as claimed by him, has issued a cheque from his bank account for ₹ 1 lakh, only because the receipt is in the name of the assessee and another person, the claim of deduction u/s 80G cannot be restricted to 50,000/- in place of ₹ 1 lakh thus, the matter is liable to be remitted back to the AO for verification Decided in favour of Assessee.
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