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2018 (6) TMI 1313 - AT - Income TaxAddition of unverifiable purchase - Held that:- The cash corresponding to the RTGS payment must have been received back by the assessee after date of payment i.e. after 21/10/2010 and therefore goods for supplying to sales parties were purchased (i.e. 21/6/2010 to 25/06/2010) from other persons, utilizing cash. The onus is on the assessee to explain when & how the cash has been paid for purchase from gray market and it is for the assessee to explain availability of cash in books of account. In such circumstances generally cash purchases are made at lower price than normal, and the gross profit of the taxpayer also becomes higher. Cash investment in purchases has not been examined by the Ld. Assessing Officer and consequently the assessee also did not get opportunity to explain its stand, we feel it appropriate to restore the issue of unverifiable purchases to the file of the Assessing Officer for deciding afresh in view of our observations above and in accordance with law after providing adequate opportunity of being heard to the assessee accordingly, this ground of Revenue’s appeal is allowed for statistical purposes. Disallowance on account of leave encashment under section 43B - Held that:- In the instant case it is evident from the order of the Ld. CIT(A) that the assessee has not made actual payment of the said amount of leave encashment. As per the provisions of the section 43B of the Act, claim of leave encashment is allowed only in payment basis. If the assessee has not made the actual payment, it is not entitled for deduction under section 43B. We do not find any error in the order of the Ld. CIT(A) and accordingly we uphold the same. The ground of the appeal of the assessee is rejected. Disallowance under section 14A - Held that:- The contention of the assessee of utilization of owned interest free funds for investment in shares of sister concern will become relevant only when the disallowance of interest attributable to investment in assets capable of yielding exempted income has been made, while computing the disallowance of ₹ 1,39,462/-. Since no such details have been furnished before us by either of the party, thus in the interest of Justice, we feel it appropriate to restore this issue to the file of the Assessing Officer for deciding afresh in accordance with law.
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