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2017 (1) TMI 449 - AT - Income TaxUnapproved payment to the subcontractors/ labour charges - parties to whom the payments were made were not genuine; none of the parties to whom the payments were allegedly made appeared during the assessment - Held that:- CIT(A) while considering this ground concluded that the assessee has produced all relevant details showing the payments made to the contractor in the shape of bills raised for work done, ledger account of these parties, copy of computation of income, ITR returns for AY 2010-11 showing the income received from the assessee, copies of bank statements and confirmation of these parties. Ld. CIT(A) further concluded that merely returned of letter undelivered does not leaves to the conclusion that payments made to these parties are not genuine. The AO has not proved by placing any other evidence that such parties are actually bogus and deleted the disallowances. We have seen that various subcontractor have filed their reply before the AO along with their copy of ledger account, bank statement, ITR return and nature of payment. The AO merely suspected that the line of reply by all parties is similar. Thus, we do not find any infirmity or illegality in the order of ld. CIT(A). - Decided against revenue Disallowance of Motor car expenses to 5% against 20% made by AO - Held that:- Two of the Car owned by assessee are provided to his employee to visit the site on regular basis. The contention of the assessee was not accepted by AO, the AO concluded that no Logbook have been maintained to prove that Car was not used for personal purpose and disallowed 20% of the expenses. Ld. CIT(A) while considering this ground concluded that use of Motorcar always contain some personal element and it is difficult to maintain the record regarding personal use and use for the business purpose and confirmed the only 5% of the disallowance. The ld. DR for the Revenue was unable to convince us as to why the 5% of expenses is not sufficient due to personal element for use of vehicle. Moreover, we have seen that more than half of the amount (Rs. 2,30,311/-) on account of depreciation and ₹ 29,880/- was claimed on account of insurances. Thus, we do not find any reason to interfere with the finding of ld. CIT(A).- Decided against revenue Addition under section 68 - Held that:- The essential ingredients to establish a loan transaction as genuine has been furnished by the assessee by filing evidence which consist of confirmation of creditors, identity of creditors, their PAN Number and even by producing them before the AO, thus the assessee has discharged his primary onus that the books of accounts as unsecured loan actually belong to him and no addition u/s 68 can be made against him. The onus shift upon the AO, if he stated that the claim of assessee is false or bogus claim is made. It was finally concluded that that AO without bringing any evidence on record that unsecured loan are bogus or not genuine has treated the loan taken from the parties as unexplained, which is not justified. We have seen that ld. CIT(A) have examined the identity of the parties which was not disputed by AO, creditworthiness of the persons was examined from their statement recorded by AO and genuinenity of transaction against which the AO has not brought any material on record. Thus, in the peculiarity of the case, we concur with the finding of ld. CIT(A), thus, this ground of appeal is also dismissed.- Decided against revenue
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