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2018 (12) TMI 283 - AT - Income TaxUndisclosed cash expenses - addition based on incriminating evidence in the form of seized document - Held that:- CIT(A) with reference to the seized materials coectly concluded that there is no evidence on record nor any investigation was carried to establish the contentions of the Assessing Officer that these payments were made to authorities for registration of the land and it is only a presumption drawn by the Assessing Officer that these payments were made to the registration authorities. He also held that even if the presumption of the Assessing Officer is considered to be true, the assessee is entitled to set off the above expenses totaling to ₹.57,22,000/- as against the admission of undisclosed income of ₹.1,43,00,000/-. Undisclosed brokerage expenses in cash based on incriminating evidence in the form of seized document - Held that:- CIT(A) in the present assessee’s case correctly concluded that the explanation of the assessee shows that ₹.10 lakhs was received by the assessee from Shri Ravi Bhushan and since the entire sum was offered to tax for the Assessment year 2009-10 as per the Assessment Order at Para. 6.2, 6.3 and 6.4, the Ld. CIT(A) concluded that the addition should not be made. Besides the above explanation even if it is presumed that the sum of ₹ 10 lacs is the undisclosed payment by the appellant company to Shri Ravi Bhushan, the same is required to be set off against the undisclosed income of ₹ 1,43,00,000/- offered by the appellant vide para no. 6.4 of the assessment order. The appellant also offered ₹ 7,00,000/- to cover up various discrepancies and totally offered a sum of ₹ 1,50,00,000/-as referred in para no. 1 of the assessment order. In view of the above, the addition of ₹ 10 lacs is not sustained - decided in favour of assessee Addition made on account of sundry expenses - Held that:- We find that the Assessing Officer observed that almost all the expenses were incurred towards government bodies. However, the Assessing Officer has not given a finding that the entire expenses incurred were only towards government bodies. Therefore, in the absence of specific finding that entire expenses were incurred only for the government bodies entire expenditure cannot be disallowed. Therefore, keeping in view the totality of the facts and circumstances, we direct the Assessing Officer to restrict the disallowance to 75% of the expenses and allow only 25% of the said expenses as deduction. Advance payments during this assessment year and therefore not allowable as expenses - Held that:- This expenditure should be taken in the Financial Year 2010-11 relevant to the Assessment Year 2011-12 as the work was commenced, completed and final bill was made during the A.Y.2011-12. Thus, the Assessing Officer shall consider these expenses for allowing in the assessment year 2011-12. Unproved purchases - AO made 100% disallowance as the supplier did not respond to the notice issued u/s.133(6) - Held that:- The sales were accepted and the assessee produced copies of invoices, bank statements, copies of delivery challans etc., entire purchases cannot be treated as bogus. Keeping in view the nature of business conducted by the assessee we direct the Assessing Officer to restrict the disallowance to 8% of the expenses. This ground is partly allowed. Disallowance of expenses being regularization fee paid Slum Rehabilitation Authority - allowable deduction u/s 37 - Held that:- We find that the issue as to whether regulation fee paid to Slum Rehabilitation Authority is in the nature of penalty for violation or prohibition of any law under Explanation to 37(1) of the Act has been considered by the Tribunal in assessee’s own case for the Assessment year 2011-12 and it has been held that such payment is not in the nature of penalty.
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