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2015 (12) TMI 29 - AT - Income TaxDisallowance under section 40(a)(ia) - assessee has not filed any bills and vouchers and hence, not allowable under section 37 - assessee’s objection was only against the disallowance of the expenditure both under section 37(1) as well as under section 40(a)(ia) - disallowance of depreciation - Held that:- We find that in the case before us, the A.O. has not estimated the income @ 8% but has justified the disallowance by stating that the disallowance would result in the assessed income being 8% of the gross profit. Both the A.O. as well as the Ld. CIT(A) have not given any reasoning as to why the claim of depreciation has not been allowed. As rightly pointed out by the Ld. Counsel for the assessee, the provisions of section 40(a)(ia) are not applicable to the payments already made. Therefore, the disallowance under section 40(a)(ia) is not sustainable. However, in the absence of bills/vouchers produced by the assessee, we do not find any reason to interfere with the order of the Ld. CIT(A) that the disallowance under section 37(1) is justified. However, with regard to claim of depreciation, we deem it fit and proper to remit the issue back to the file of A.O. for consideration of the same in the light of judgment of the Hon’ble A.P. High Court in assessee’s own case for A.Y. 1998-99. - Decided partly in favour of assessee for statistical purposes.
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