2018 (3) TMI 1752

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....her erred in sustaining the same to the extent of Rs. 2,00,000/- by wrongly observing that the assessee has agreed for this addition during the course of assessment and this observation was made by Ld. CIT(A) without giving opportuntiy of hearing. 2. That in any case and in any view of the matter, action of Ld. CIT(A) in sustaining the action of Ld. AO in making addition of Rs. 2,00,000/- on account of suppression of income is bad in law, against the facts and circumstances of the case and without observing the principles of natural justice. 3. That having regard to the fact and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not deleting the disallowance of Rs. 4,89,934/- fully as made by Ld. AO on ....

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.... record was illegally not considered by the ld. CIT(A). 5. On the other hand, the ld. DR has duly strongly supported the impugned order. It is stated that the AO has observed that the rent was paid to persons covered u/s 40A(2)(b) of the Act. 6. Heard. It is true that the AO observed that the payments were made to the persons covered u/s 40A(2)(b) of the IT Act. But that is why section 40A(2)(a) has been invoked. The issue is whether the AO's opinion that the expenditure was excessive, is correct. As per section 40A(2)(a), such opinion of the AO is to be formed having regard to the fair market value of the goods in which the payment is made. For this, the AO has to place on record material showing the fair market value of the goods. I....