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2015 (6) TMI 941 - AT - Income TaxDisallowance u/s 40A(3) - Held that:- So far as disallowance on account of purchase of steel from Panvel office imprest account, telephone charges of direction and gardening and plantation, the same cannot be disallowed u/s 40A(3) as per the reasons given by the learned counsel. Accordingly, the assessee gets relief of ₹ 16,092/- and balance amount of ₹ 13,873/- is confirmed. - Decided partly in favour of assessee. Disallowance of donations - Held that:- The assessee has not claimed any such claim of donation in the computation of income, rather it appears in the ledger account of Managing Director. It is the payment made by the individual and not by the assessee, therefore, no disallowance should be made in the hands of the assessee. Accordingly, we direct the AO to delete the said disallowance after verifying the contention of the assessee that the amount of donation has not been claimed by the assessee. - Decided in favour of assessee. Estimate of net profit rate of 8% from the sale of development rights - Held that:- There is no allegation that the payment made by the assessee in the earlier years have been claimed by the assessee. These costs are always taken to work-in-progress. The assessee had spent money to made the payments to the members of co-operative housing to the CIDCO to acquire the rights to develop, then such a payment has to be allowed as cost. No proper basis has been given either by the AO or by the Ld. CIT(A), to estimate the profit on sale of rights. If the cost has been incurred in the earlier year for the acquisition of development rights and if the same has been sold in this year, then, the same has to be allowed. It is not the case of the department that the assessee has claimed the cost/expenditure in the earlier years, therefore, the profit has to be taken at ₹ 2,00,000 as shown by the assessee and addition confirmed by the Ld. CIT(A) on estimate of net profit of 8% is deleted. - Decided in favour of assessee.
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