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2018 (11) TMI 1637 - AT - Income TaxBogus purchases - non production of books of accounts and persons in support of her claim - CIT(A) in restricting the disallowance to 30% - HELD THAT:- The assessee proving genuineness of expenses submitted various details such as copy of agreement, copy of account for labour contractors and various agreements along with copy of the bank statement showing that the expenses were paid to account payee cheques and bank statements of contractors were also produced showing the credit of the said cheques. The assessee also furnished copy of the bills, accounts, confirmation letters and contra accounts of recipient showing the tally of payment details which again supports the claim of the assessee. CIT(A) issued notices to some suppliers and they confirmed the transitions and filed relevant details. The assessee also filed details of expenses and the addresses of the suppliers before the AO. We agree that merely because relevant vouchers have not been submitted for verification the books of accounts cannot be rejected only on this ground. We also agree to the conclusion drawn by CIT(A) that the disallowance of 30% of claimed expenses is suffice to meet the ends of justice as this amount covers all the possible leakage of revenue in consequent to the non availability of the relevant vouchers and other documents for verification by the Revenue authorities. Therefore, we are inclined to hold that the conclusion drawn by the CIT(A) in restricting the disallowance to 30% of total claim is quite correct and justified. Addition on account of alleged sundry creditors proved bogus - CIT(A) issued notices u/s. 133(6) to nine major parties/sundry creditors and all the parties replied to the notice and copies of their replies were verified - HELD THAT:- CIT(A) was right in holding that without any concrete material or evidence showing unexplained or unaccounted income of the assessee introduced in the cover of sundry creditors, the addition made by the AO merely on the basis of suspicion, presumption and assumption cannot be held as sustainable. CIT(A) has called the assessee to submit all the details of transaction with each and every creditor which was submitted by the assessee and reproduced by the ld. first appellate authority in para (c) at pages 6 to 11 of the first appellate order. CIT(A) issued notices u/s. 133(6) of the Act to nine major parties/sundry creditors and all the parties replied to the notice and copies of their replies were verified by the ld. CIT(A) in the subsequent paras of impugned order, which shows the exercise and examination undertaken by the ld. CIT(A) before granting relief to the assessee. CIT(A) referred to the ratio of the decision in the case of CIT vs. Navendram Ahuja [2005 (2) TMI 95 - MADHYA PRADESH HIGH COURT] and thereafter, recorded as finding that the addition/disallowance made on the basis of presumption and assumption is not sustainable and correct in view of the absence of concrete and sustainable allegation and evidence or adverse material against the assessee Addition of amount deposited in bank account remained unexplained - HELD THAT:- Assessee deposited cash amount to these three bank accounts and the source of the same has been explained as the amounts received on account of advances received from the prospective buyers of flats/units in the two projects of the assessee. Ld. CIT(A) has also considered and noted the amount of ₹ 1,02,29,487/- which is the impugned amounts deposited to the said three bank accounts of the assessee. These factual findings have not been controverted by the AO or ld. DR during arguments before us. Therefore, these factual findings supports the conclusion arrived by the CIT(A) that the amounts added and assessed as unexplained sundry creditors includes the impugned amount of ₹ 1,02,29,487/- which was deposited to the three bank accounts of the assessee therefore, the same cannot be treated as unexplained bank deposits in absence of any adverse or positive incriminating evidence or material. - Decided against revenue.
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