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2014 (7) TMI 1312 - AT - Income TaxDisallowance of sub-brokerage expenses - burden of proof for the claim u/s. 37(1) - HELD THAT:- The assessee has admittedly not filed confirmations in respect of the expenditure to the extent of ₹ 26,54,460/- (the same may, in view of an admitted difference of ₹ 59,103/-, would stand restricted to ₹ 25,95,357 / refer paras 3.4 & 3.7 of this order). There is, accordingly, and clearly, no discharge of the initial onus on the assessee u/s. 37(1) to that extent. The expenditure consequently cannot be allowed, except in the circumstance of the noticee responding agreeably, i.e., with the assessee’s record – with the A.O. having not acted upon the same, so that there is no reason or nothing on record to doubt the veracity or the authenticity of the information furnished by the payee. There is no such response in the instant case. As such, irrespective of whether the notices u/s.133(6) stand issued by the A.O. or not (which could again be for the reason of lack of proper address, etc.), the initial onus having not been discharged in its respect, expenditure to that extent, i.e., ₹ 26,54,460/-, stands to be disallowed. Expenditure with reference to any particular payee (sub-broker) - HELD THAT:- We are in agreement with the ld. DR that the Revenue has in fact acted liberally, allowing the claim for expenditure where as much as a valid confirmation as to the receipt of payment stands filed. We may further add that the figures stated by us in this order have been adopted as furnished by the assessee before us, upon being sourced from the A.O. under RTI Act. The same, therefore, would be subject to confirmation by the A.O. while giving appeal effect to this order. Further, there being admittedly a difference of ₹ 59,103/-, the assessee shall either explain or reconcile the said difference by locating the source of error. In case, however, the same cannot be and neither is the same found by the A.O.; the total expenditure claimed being at a amount lower (by that amount) for which the detail stands submitted, the benefit of doubt would go to the assessee, so that the expenditure to be allowed with reference to any particular payee (sub-broker) shall be as stated, i.e., without any adjustment or modification on account of the said error/difference. We decide accordingly.
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