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2017 (11) TMI 2042 - AT - Income TaxDisallowance u/s 40A - payment of packing expenses and advertising expenses - as submitted assessee has made payment to two companies for manufacture of purses and bags and manufacturing activities are done on a very small basis from his own house and the activities are in the nature of cottage industries - HELD THAT:- As correctly decided by CIT(A) expenditures of more than ₹ 20,000/- have been incurred in cash and the same was disallowed by the AO under section 40A(3). In the present proceedings, it was stated that parties to whom payment made are manufacturer of purses and bags on small basis and are in the nature of cottage industries. However, no evidence to that effect was produced by the Authorized Representative, further it was also not stated as to how they are covered under the exception to the provisions and hence, the disallowance made by the Assessing Officer is confirmed. The ground of appeal is dismissed. Unexplained cash - HELD THAT:- As correctly decided by CIT(A) Authorized Representative claimed that the cash bill of sale of articles dated 20.01.2012 had been produced but since the sale was in cash the address was not available with the assessee and neither any confirmation was produced nor the party could be produced for the verification. It is seen that the books of accounts are audited and hence the mistake would have been detected. Secondly, no advance has been found recorded in the name of Jai Singh Kumawat on 13.03.2012, further no evidence in the form of confirmation or producing the party was undertaken and in fact the authorized Representative submitted that his address was also not available. In view of the above facts, the explanation of the appellant cannot be accepted and the addition made is confirmed. Disallowance of various expenses - expenses are not properly vouched, some of payment in cash, personal use etc. - HELD THAT:- Assessee placed reliance on the Coordinate Bench decision [2016 (4) TMI 658 - ITAT JAIPUR] in the case of Shri Anil Kumar Agarwal vs. ITO wherein similar additions on identical facts have been deleted. In the present case the AO has not rejected the books of accounts of the assessee. The additions made merely on adhoc basis is not sustainable. We, therefore, delete the addition. Valuation of surrendered stock during survey - income from other sources or income from business - HELD THAT:- At the time of hearing, Assessee drew our attention to various details of gold and diamonds ornaments and valuation thereof are mentioned. After considering these details, we find that the details mentioned in the annexure require verification whether the stock surrendered was restricted to gold or diamond as claimed by the assessee. We, therefore, set aside the order of the ld. CIT (A) and restore the file to the AO for decision afresh after making verification of the stocks surrendered. The grounds of the assessee are allowed for statistical purposes.
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