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2022 (5) TMI 1007 - AT - Income TaxDisallowance of cost of construction - addition for the reason that the assessee was not sure of constructing his own house and hence a sum would not have been available for investment in the construction of the new house - CIT(A) noted that the construction of house involves cash purchases from many people most of whom are in unorganized sector and would not like to appear before authorities - HELD THAT:- As no clarity whether the withdrawals were utilized for construction of building and accordingly, AO was directed to verify the said facts. Pursuant to these directions, the assessee filed confirmation letters wherein it transpired that the money was paid only to close relatives. AO issued summons to the payees, however, none appeared except one who denied having issued any such confirmation. In one case, tiles were found to be purchased even before purchase of land on which the building was to be constructed. Various other discrepancies were also noted in the confirmations. Finally, it was concluded by AO that the confirmations were fabricated and not supported by any material evidences - CIT(A), in our considered opinion, clinched the issue in correct perspective and held that the construction of house involves cash purchases from many people most of whom are in organized sector and would not like to appear before authorities. However, the disallowance of 30%, in our opinion, is on the higher side. Considering the given factual matrix, wee direct Ld. AO to restrict the same to the extent of 10% instead of 30% as estimated by Ld. CIT(A). Appeal partly allowed.
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