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2016 (7) TMI 396 - AT - Income TaxDisallowance of the claim of deduction U/S 80IA(4) - Held that:- The assessee has filed copies of performance guarantees given by the assessee on behalf of PCL-ILHC as an additional evidence to prove that the assessee had undertaken the financial obligations as well. On going through these documents, we find that the Government Agency i.e., THDC has accepted the assessee to be the official sub-contractor executing the entire project and even the original contractor and the Rithwik Swati J.V. have accepted the assessee to be the subcontractor who has taken on all the assets, risks and liabilities of the contract. As in the case of the A.L. Logistics P. Ltd. [2015 (1) TMI 401 - MADRAS HIGH COURT], the Hon’ble Madras High Court has held that where the Government has given an approval to the assessee to execute the work, even in the absence of any specific agreement, the assessee is eligible for deduction under section 80IA of the Act. Taking all the above into consideration, we are in agreement with the contentions of the assessee that the assessee is eligible for making claim under section 80IA(4) of the I.T. Act as the assessee is considered to be the official sub-contractor of the said project and also in view of the fact that the employer or the original contractor or the Rithwik Swati JV have not claimed the deduction under section 80IA of the Act. This issue is therefore decided in favour of the assessee. Unexplained expenditure - Held that:- We are satisfied that the assessee has not proven that the expenditure has been incurred for the business purpose of the assessee and since the recipient has denied having executed any work, it cannot be considered as genuine expenditure and cannot be allowed. Disallowance u/s 40A(3) - Held that:- CIT (A) correctly confirmed the order of the AO by holding that the AR has furnished any explanation, leave alone but the evidence to show that it was covered by any of the expenses given under Rule 6DD.
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