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2023 (10) TMI 1137 - ITAT KOLKATABogus advances receipts - advances against sale of flats which have been shown under the head unsecured loans and advances from the parties - AO held that the advances from these parties were not proved - HELD THAT:- We have perused and examined the profit and loss account for the FY ending 31.03.2012 and found that the assessee has shown sales of flats which is in agreement with the details furnished by the assessee in which the amount received from party was duly adjusted and shown as sale. We note that the assessee has sold these flats in the subsequent years and the sale has duly been shown in the books of accounts and due taxes have also been paid. We are surprised to note that the AO has treated the advances as bogus in respect of which the sale deeds were executed in the subsequent years. We direct the AO to delete the addition. Project expenses disallowed - addition by CIT(A) as made by the AO on estimated basis by adding 25% of the total project expenses claimed by the assessee - HELD THAT:- After examining profit and loss account, the vouchers filed by the assessee, we note that these were expenses incurred in connection with the construction of the flats project which were duly supported with the bills and vouchers and has been correctly shown in the expenses side of the profit and loss account. We note that the substantial part of the project expenses has gone into closing work-in-progress which was carried forward to the subsequent year as closing stock as there were 14 unsold flats in hand. We note that the AO has not given any reason for disallowing 25% of the project expenses and only cited the non-production of bills and vouchers whereas on the other hand the assessee has filed all the evidences before us and we note that all these expenses were genuinely incurred for the project of construction of flats. Accordingly, we are not in a position to sustain the ad-hoc disallowance of expenses that too without any basis - Decided in favour of assessee.
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