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2017 (3) TMI 1299 - AT - Income TaxAddition of bogus purchases - Held that:- AO has noted that despite various opportunities, the assessee did not produce the parties for verification nor has produced any details to support the purchases made. Ld. CIT(A) has also noted that assessee was not able to furnish details regarding the address of the parties as well as confirmations even during the Appellate Proceedings. Before us also assessee has not been able to furnish any evidence with respect to purchases. In view of the aforesaid facts, we find no reason to interfere with the order of ld. CIT(A) and thus, the ground of the assessee is dismissed. Disallowance u/s 40A(2)(b) - Held that:- In the present case out of total salary of ₹ 16,80,000/-, AO has disallowed 50% of the salary holding to be excessive and disproportionate. Before us, it is assessee’s submission that Mrs. Divya Kharbanda has been paid similar salary in earlier years and she has been drawing same salary since F.Y. 2007-08 and also in subsequent years and in none of the earlier or subsequent years the disallowance on account of salary being excessive has been made by the Revenue authorities. We further find that Hon’ble Bombay High Court in the case of CIT Vs. Indo Saudi Services (Travel) P. Ltd (2008 (8) TMI 208 - BOMBAY HIGH COURT) after considering the CBDT Circular No.6-P, Dt. 6th July, 1968 has held that no disallowance of expense can be made when the person to whom the payment is made is also assessed at higher rate and there is no evasion of tax. Thus we are of the view that in the present case, no disallowance of expenses u/s 40A(2)(b) is called for and therefore direct its deletion. - Decided in favour of assessee
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