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2017 (12) TMI 1048 - AT - Income TaxAddition u/s 69C - Held that:- We find that similar issue arose in the case of the assessee for the immediate previous assessment year 2010-11 [2017 (12) TMI 1071 - ITAT MUMBAI]. The Tribunal upheld the disallowance @ 15% of the bogus purchases made by the Ld. CIT(A). Facts being similar, we direct the AO to estimate the profit @ 15% on the bogus purchases of ₹ 1,88,40,628/- in place of 28.4% made by the Ld. CIT(A) and make the addition accordingly. Addition u/s 40(b) - Held that:- Indisputably, as per the partnership deed dated 22.05.2003, remuneration to the working partners has been authorized to be paid in accordance with the computation provided in section 40(b). We find that the AO has not taken into account the amended provision of section 40(b) for the impugned assessment year. CIT(A) has rightly taken into account the said amended provision and then restricted the disallowance to ₹ 1,20,000/-. Accordingly, we uphold the order of the Ld. CIT(A) on the above ground of appeal. Addition u/s 41 - Held that:- Addition u/s 41(1) cannot be made unless and until it is found that there was remission and/or cessation of liability, that too during the relevant assessment year. SEE Matru Prasad case [2015 (4) TMI 830 - GUJARAT HIGH COURT] Disallowance of claim of pollution control equipment expenses - Held that:- We find that the AO failed to give a single opportunity to the assessee to explain its case on the above issue. A proper hearing must always include a fair opportunity to those who are parties in the controversy for correcting or contradicting anything prejudicial to their view.In view of the above, we set aside the order of the Ld. CIT(A) and restore the matter to the file of the AO to decide the issue afresh Unauthorized occupation penalty - allowance u/s 37 - Held that:- We find from the ledger account that cheque no. 163966 has been paid towards MCGM unauthorized occupation penalty. As this is purely penal in nature, we uphold the order of the Ld. CIT(A) and dismiss the 3rd cross objection raised by the assessee.
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