TMI Blog2015 (8) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... idence filed by the Assessee and, therefore, the CIT(A) was justified in deleting the additions "which have been made only on the basis of a doubt created or suspicion in the mind of the AO". Significantly, the ITAT observed that nothing had been found during the search operation with regard to the land development expenses and the AO had also not taken the post search inquiries to the logical end. Both the CIT (A) and the ITAT have in fact discussed the materials on record including the statements of four of the contractors and the report of the Inspector. As rightly pointed out by the ITAT, the evidence submitted by the Assessee including photographs and DVDs demonstrating the land development was not properly verified or inquired onto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee submitted the PAN numbers, bank account details, TDS deducted, etc. in respect of such contractors. It also furnished DVD and photographs to show how barren agricultural land was first purchased and then developed and sold. 3. The case of the Revenue as reflected in the order of the AO dated 31st December, 2008 was that in response to the inquires made one Pradeep Kumar Jindal, the 'kingpin of the group' of contractors purportedly admitted in his statement before the Income Tax Officer ('ITO') on 13th December, 2008 that no work in fact had been done by the contractors and only the bills were raised, cheques received and the and repaid in cash. The details of five cases of payments made to the contractors were set out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed that the only ground on which the AO disallowed the land development expenditure was that the parties were not found at the given addresses thereby creating suspicion as to the genuineness of the expenditure. It was held that suspicion, however great, could not substitute for evidence. It was a matter of record that two searches were conducted at the premises of the Assessee on 22nd September 2005 and 25th August 2006 and no incriminating documents, books of accounts etc. were found or seized to indicate that the Assessee had claimed any bogus expenditure to reduce the burden of the tax liability. In the circumstances, the additions made by the AO were directed to be deleted. The AO was directed to examine the land development expe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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