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2015 (7) TMI 726 - AT - Income TaxUndisclosed income of assessee - CIT(A) deleted the addition - Held that:- Assessee has shown ₹ 3,00,000 as the amount received when sale took place and balance ₹ 3,00,000 as development charges. Therefore, in our view, in case of each of the transaction, an exercise has to be undertaken to find out not only the fact whether they appear in the accounts of assessee but also whether there is any variation between the amounts received as per list submitted by assessee and the loose sheets impounded at the time of survey. In our view, ld. CIT(A) should have given opportunity to AO to verify these facts to find out the authenticity of assessee’s claim. Neither allowing opportunity to AO to properly verify the facts nor having himself verified the facts in detail, ld. CIT(A) should not have deleted the addition merely relying upon the submissions of assessee. In the aforesaid view of the matter, we set aside the order of ld. CIT(A) on this issue and remit the matter back to the file of AO for deciding the same after reasonable opportunity of hearing to Assessee to explain its case. AO must verify the documents submitted by assessee and thereafter take a decision in the matter. - Decided in favour of revenue for statistical purposes. Disallowance made u/s 40A(3) - CIT(A) deleted the addition - Held that:- Though, assessee claimed before ld. CIT(A) that payments were made to persons at places where banking facility is not available, but, in our view, assessee’s claim has to be proved through either certain process of enquiry or evidence brought on record. As it appears from the order of ld. CIT(A), he has accepted assessee’s claim on the face value without making any enquiry or referring the matter to AO. Therefore, we set aside the impugned order of ld. CIT(A) on this issue and remit the matter back to the file of AO to verify assessee’s claim that banking facility is not available at places where payments were made to concerned persons, hence it comes within the purview of rule 6DD. AO must afford reasonable opportunity of being heard to assessee before deciding the issue.- Decided in favour of revenue for statistical purposes. Disallowance made u/s 40(a)(ia) - CIT(A) deleted the addition - Held that:- As can be seen, against the payment towards agent commission, assessee has deducted an amount of ₹ 1,38,300 and remitted to the govt. account, hence, AO’s allegation that no tax was deducted is incorrect. As far as the development expenses are concerned, assessee has deducted tax on amount of ₹ 21,27,450 and the balance amount of ₹ 22,52,333, assessee itself disallowed and added back in the computation of income. Therefore, allegation of AO is proved to be wrong. Therefore, we agree with ld. CIT(A) in deleting these two additions. As far as, rent payment and payment towards development charges are concerned, we are of the view that assessee’s contention that TDS provisions do not apply to these payments need to be verified by AO. - Decided partly in favour of revenue for statistical purposes. Disallowance of expenditure - CIT(A) restricting the disallowance - Held that:- As can be seen while AO has disallowed 10% expenditure out of the expenditure claimed by assessee under various heads, ld. CIT(A) has restricted the disallowance to the expenditure claimed towards development expenditure, site visit expenditure, survey charges and preliminary expenses. In our view, the decision of ld. CIT(A) on this issue is just and proper and do not call for any interference. Though, assessee could not produce necessary proof in respect of claim of expenditure before AO, but, ld. CIT(A) has allowed assessee’s claim after considering the fact that expenditure claimed towards directors remuneration, agents commission, development expenses etc. should not be disallowed on adhoc basis as assessee has actually incurred these expenditures. Ld. AR also submitted, assessee itself has disallowed expenditures where there are no supporting evidences, therefore, no further disallowance should be made. In view of the aforesaid, we uphold the order of ld. CIT(A) on this issue by dismissing the ground raised.- Decided against revenue.
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