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2015 (1) TMI 606 - AT - Income TaxDisallowance of unaccounted business expenditure on repairs and renovation of factory shed - CIT(A) confirmed the action of the Assessing Officer and further held that the expenditure is also not allowable in view of the Proviso to Section 69C of the Act - Held that:- AR of the assessee has not made any submission as to why even in view of the above Proviso to Section 69C the expenditure incurred from deemed income whose source has not been explained should still be allowed as deduction to the assessee. In absence of the same, we do not find any good reason to interfere with the order of the CIT(A) which is confirmed and the ground of appeal of the assessee is dismissed. - Decided against assessee. Addition of income - Held that:- Addition of ₹ 39,882/- made only on the basis of statement recorded u/s 133A is unsustainable in law; accordingly, we delete the addition of ₹ 39,882/- and allow this ground of appeal of the assessee. - Decided in favour of assessee. Addition on account of low gross profit which includes disallowance of deliberate loss of ₹ 31,35,469/- incurred on sale of gray cloth in the post-survey period - CIT(A) deleted the addition - Held that:- he Revenue could not point out any specific error in the order of the CIT(A). The Revenue could not point out the amount of loss incurred on sales made to sister concerns and that to other parties. Further, no material was brought on record by the Revenue to show that on the date of sale made to sister concerns the assessee had made sales to other parties at a price more than that charged from sister concerns. In absence of the same, we do not find any good reason to interfere with the order of the CIT(A) which is confirmed and thus, these grounds of appeal of the Revenue are dismissed. - Decided against revenue. Disallowance made out of the excess claim of expenditure under the head 'Brokerage' to its sister concerns - CIT(A) deleted the disallowance - Held that:- Assessing Officer made disallowance out of brokerage expenses of ₹ 2,60,385/- u/s 40A(2)(b) of the Act as he observed that the brokerage paid to sister concerns was at the rate of 5.25% of the job receipt; whereas the brokerage paid to other persons was at the rate of 4%. The CIT(A) has deleted the addition merely by observing that the expenditure was incurred wholly and exclusively for promoting the business activities of the assessee. The CIT(A) has given no reason or brought out any distinguishing fact for which the assessee had paid higher brokerage of 1.25% to the sister concern. Thus, we find that the order of the CIT(A) is an unreasoned and cryptic order which is not sustainable in law. We, therefore, set aside the order of the CIT(A) and restore the matter back to his file for adjudication afresh by passing a well reasoned and speaking order, after allowing a reasonable opportunity of hearing to the assessee. Decided in favour of revenue for statistical purposes. Penalty u/s 271(1)(c) - claim of deduction on account of repairs and renovation of factory shed - Held that:- Mere making of claim, which is not sustainable in law, by itself, will not amount to furnishing of inaccurate particulars regarding the income of the assessee. We, therefore, delete the levy of penalty. - Decided in favour of assessee.
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