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2019 (10) TMI 198 - AT - Income TaxDisallowance of land development expenditure and out business promotion expenses - HELD THAT:- The assessee has explained this aspect also to our mind, a perusal of the fact observed by the assessee, on examination of the alleged contractor, who performed the work of the assessee coupled with the statement of the assessee, it is not clear that all these expenses were exclusively laid out for the purpose of business. Some element of incompleteness in the details submitted by the assessee is involved. CIT(A) estimated the expenditure incurred by the assessee at ₹ 3.00 lakhs per acre, but that estimation is also not supported with any surrounding circumstances. Photography taken during the course of search by the Revenue would indicate that grass was cut, trees were uprooted. All these evidences collected after one year of the transaction. The question is how to work out that the work which has been got done by the assessee, and accepted by the CIT(A) could be achieved in ₹ 3 lakhs and not ₹ 4,45,000/-. The disallowance at ₹ 1,44,000/- per acre out of expenditure claimed at ₹ 4,44,000/- is almost more than 30% of the expenditure claimed by the assessee. To our mind, even if there are lacunae in maintaining details at the end of the assessee, and he has claimed some inflated expenditure, that should be around 8% to 10% of the total and not 30%, because in this activity maximum profit even for the contract could be estimated at 8%. Therefore, in our opinion, ends of justice would meet if we scale down this disallowance of expenditure of ₹ 63,59,000/- to ₹ 30,00,000/-. We direct accordingly. Disallowance of business promotion expenses - After going through the order of the ld.CIT(A) we do not find any merit, and more particularly, no convincing arguments were advanced. It is confirmed.
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