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2014 (4) TMI 1292 - AT - Income TaxAddition of “Annual Maintenance Contract” expense made by the AO without rejecting the books of accounts u/s.145(3) - adhoc disallowance of 15% of the total expenditure claimed without any basis and the same should be extracted to a reasonable disallowance - HELD THAT:- Having heard the submissions of both the sides, we are of the view that although the assessee has placed on record the income tax returns of those parties, barring few, the details of the payment, details of tax deducted at source, which was duly supported by their respective statements recorded by the AO but still the learned CIT(A) thought it proper to adopt a reasonable percentage of disallowance. As far as the documents are concerned, a voluminous compilation is placed before us pertained to ledger account; invoices and bank statements. Additionally, it has also been argued before us that none of the parties were related to the assessee and there was no allegation of the Revenue that the payment was made to the connected parties. In support of this contention that in a situation when the payment has been made to unconnected parties and TDS was deducted then the disallowance of expenditure was not justified, a case law of ITAT ‘D’ Bench Ahmedabad pronounced in the case of BMS Projects Pvt. Ltd. [2013 (1) TMI 1044 - ITAT AHMEDABAD] has also been cited. Considering all we have noted that one of the party was suffering from cancer out of the five parties who have not been produced, therefore, further relief can be granted to the assessee. However to cover up any leakage and also considering the fact that rest of the four parties could not be produced we hereby restrict the disallowance to a round figure of Rs.20 lacs which according to us is a fair and reasonable estimate. Ground of the Revenue stands dismissed.
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