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2021 (1) TMI 946 - AT - Income TaxDisallowance of development charges - applicability of provisions of section 40A(3) - In the absence of details relating to development expenses, the A.O. had disallowed the above said amount in assessment year 2010-11 - HELD THAT:- Applicability of provisions of sec. 40A(3) could well be appreciated only if the documentary evidences were also examined, besides the ledger extracts. We have earlier noticed that the assessee has not furnished documentary evidences before A.O. and hence the applicability of provisions of section 40A(3) of the Act was also not actually examined by the A.O. The expenditure claimed by the assessee formed part which was incurred by the assessee during the year relevant to the assessment year 2010-11. As noticed earlier, the assessee has claimed proportionate expenditure relating to the whole of sites affected by it. Since the assessee has claimed the expenditure during the year under consideration, it is the duty of the assessee to prove the expenditure before the A.O. by furnishing relevant documentary evidences. Since the Ld. CIT(A) has also not examined the documentary evidences, we are of the view that this issue requires fresh examination at the end of the A.O. with regard to both the issues, viz., the genuineness of the expenses and applicability of section 40A(3) of the Act. Disallowance of payment for purchase of land u/s. 40A(3) - A.O. noticed from the details furnished by the assessee that the assessee has paid a sum by way of cash towards purchase of land and since the land formed trading stock of the assessee, the A.O. disallowed the above said payment by invoking the provisions of section 40A(3) - HELD THAT:- We noticed earlier that the assessee did not offer any explanation before A.O. with regard to the payment made by way of cash towards purchase of land. However, before Ld. CIT(A), the assessee has taken support of provisions of rule 6DD and the Ld. CIT(A) has also granted relief without properly examining the claim of the assessee. Under these set of facts, we are of the view that this issue also requires fresh examination at the end of the A.O. Accordingly, we set aside the order passed by Ld. CIT(A) on this issue and restore the same to the file of the A.O. for examining the claim of the assessee afresh. Appeal filed by the revenue is treated as allowed for statistical purposes.
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