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2014 (2) TMI 839 - ITAT HYDERABADExpenditure incurred on construction of compound wall – Held that:- The Assessee has not proved the cost on the improvement made to the property and even the cash flow statement filed does not show any expenditure incurred - in the absence of any evidence of incurring the amount, the same cannot be considered as deduction while computing capital gain - To that extent, the order of the AO/ CIT(A) is confirmed – the AO made the addition to total income returned where as he has to adjust the same in capital gain computation – the AO is directed to exclude the amount as a direct addition to the total income returned and to compute capital gain separately, as capital gain tax rate is lesser than the tax on other incomes – Decided against Assessee. Addition towards domestic expenses on estimate basis - Held that:- No evidence was furnished against the withdrawal from any other source towards domestic expenditure - in view of smallness of the personal expenditure claimed, it would be reasonable to restrict the disallowance – Decided partly in favour of Assessee. Addition made u/s 68 of the Act – Advances against sale of shop and agricultural land – Held that:- Assessee contended that the documentary evidence submitted by him has not been properly verified by the AO - it is better to examine the parties concerned and also the cash flow statement furnished by Assessee, which was not done by AO – thus, the matter remitted back to the AO – Decided in favour of Assessee. Disallowance of expenditure - Leveling of land and construction of compound wall claimed as cost of improvements for the purpose of capital gains – Held that:- The amount has not been shown as expenditure in ways and means statement – thus, in the absence of explanation about source / evidence of having spent the amount of expenditure by way of documents, it cannot be allowed to that extent – Decided against Assessee. Addition on account of interest receipt – Held that:- The decision in G. Venkat Rao & Others Versus Asstt. Commissioner of Income-tax, Circle 8(1), Hyderabad [2012 (10) TMI 530 - ITAT HYDERABAD] followed - assessee submitted that there is income for the year under consideration and the profit & loss account does not debit any interest paid to the partners - Even the capital account does not have any credit under the head 'interest' - Interest paid to partners, which has been disallowed in the hands of the partnership firms cannot be assessed in the hands of the partners – thus, the matter remitted back to the AO for fresh adjudication – Decided in favour of Assessee.
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