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2014 (11) TMI 295 - AT - Income TaxPurchases made disallowed – Genuineness of purchases - Held that:- The genuineness of the purchases is suspected only for the reason that the five parties were not available in the given addresses - the AO himself, during the course of remand proceedings, have obtained the bank statements of the five parties - It is in the common knowledge of everybody that the bank account, now a days, could be opened only on submission of proper documents - the assessee has furnished the Sales tax documents of the five parties and also their income tax details to prove their existence - the assessee has furnished many documents to prove the existence of the parties and they have not been controverted by the AO - the assessee had made the payments to the above said parties by way of account payee cheques - the transactions have been routed through the bank accounts - In the absence of any material, the view taken by the tax authorities that the purchases amount is liable to be disallowed u/s 40A(3) of the Act cannot be accepted – the AO has accepted the fact that the quantity details of purchases and sales have been reconciled by the assessee - CIT(A) was not justified in confirming the disallowance of purchases – Decided in favour of assessee. Donation expenses disallowed – Held that:- CIT(A) has confirmed the disallowance on the reasoning that the payment is not related to the carrying on of the business – the order of the CIT(A) is upheld – Decided against assessee. Disallowance out of telephone expenses – Held that:- Since the assessee could not furnish proper explanations - the assessee did not furnish any convincing explanation or the letter obtained from Shri Mahendra Sanghvi regarding the usage of telephone – the order of the CIT(A) is upheld – Decided against assessee. Disallowance of 20% amount under Hamali and Cartage Charges – Held that:- The expenses incurred entirely on cash payment and further they were not supported by any evidence - no fresh evidence or arguments were advances – thus, the order of the CIT(A) is upheld – Decided against assessee
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