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2015 (12) TMI 1324 - AT - Income TaxAddition on account of unverifiable construction expenses - CIT(A) deleted the addition - Held that:- The assessee had shown the additional income in the returns furnished by him and his son and the AO had not recorded any finding that there was any evidence of any unexplained expenditure/ investment or any income which was not covered in the additional income disclosed by the assessee. CIT (A) has rightly held that there was no justification for making ad hoc disallowance of 10% out of the expenditure claimed to have been incurred by the assessee in construction business. We agree with the Ld. CIT(A) that whether the assessee was a builder/developer or a civil contractor is not relevant and only the issue is estimation of reasonable net profit of the assessee's business. In any case, section 44AD of the Act is not applicable in the assessee’s case because the turnover of the business exceeded ₹ 40,00,000/-. When the assessee is a builder/developer and is engaged in construction activities, and the assessee had shown a net profit rate of 10% of his gross receipt, whereas the rate of 8% is given in section 44AD for civil contractor is to be taken only as a benchmark for the purposes of estimation of net profit in such cases. Therefore, we concur with the ld CIT(A) that the ad hoc disallowance was not warranted and we find no merits in this ground of appeal of the department. In view of the above, we hold that the ld. CIT (A) rightly deleted the addition - Decided against revenue Addition on account of cash expenditure exceeding ₹ 20,000/- - CIT(A) deleted the addition - Held that:- We find that the payments were made in cash to stamp vendors who acted as the agents of the Government for selling stamp papers, hence, such payments were covered under the exception provided in Rule 6DD(b). We further find that these payments were duly vouched by the physical existence of stamp papers in question which were actually utilized for purpose of acquiring the land in question. Therefore, we uphold the order of the ld. CIT (A) deleting the addition of ₹ 1 lakh made by the AO. Decided against revenue
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