2021 (4) TMI 295

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....ng the appeal for the assessment year 2012-13 vide order in Appeal no. 0026/CIT(A)-1, Hyderabad/2015-16/2018-19 dated 31.08.2018. 2. The Ld. CIT(A) erred in upholding the addition made by AO of Rs. 68,28,496/- being the @20% disallowance towards land development charges of Rs. 3,41,42,478/- though considered as revenue expenditure and is to be allowed, but erred in upholding the said addition without valid reason, which is against to the principle of natural justice. 3. Without prejudice to the above, the Ld. CIT(A) ought to have restricted the disallowance to 0.5% of Land Development expenditure Rs. 3,41,42,478/- keeping in view of the decision of the Hon'ble IT AT in the case of M/s Padmalaya Telefilms Limited Vs ACI....

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....28,496/- was disallowed and added back to the assessee's total income. 2.2. Further, on verification of Profit & loss account, the AO noticed that, the assessee claimed an amount of Rs. 85,784/- as "Contribution to PF & ESCI"., Under the head "Employee benefit expenses". But on going through the details submitted with regard to the above payments, he noticed that the assessee paid only an amount of Rs. 24,742/- in time, and the balance amount of Rs. 61,042/- has not paid in time, hence the late payment of Rs. 61,042/- was not allowable expenditure U/s. 43B of the Act, and accordingly the above amount of Rs. 61,042/- is disallowed u/s. 43B and added back to the assessee total income. 3. When the assessee preferred an appeal before ....

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....AO made the disallowance of 20% disallowance on the land development expenses claimed by the assessee on the ground that the assessee failed to establish the expenses are genuine as the most of the vouchers produced were self-made and also not in proper order for verification. The contention of the assessee is that disallowance of 20% of total expenditure is very high. Considering the totality of the facts of the case, we direct the AO to disallow 10% of the total expenditure of Rs. 3,41,42,478/-, instead of 20% made by him. Accordingly, the ground Nos. 2 & 3 raised on this issue are partly allowed. 7. As regards ground No. 4 regarding disallowance of Rs. 61,042/- u/s. 43B, The AO noticed that the assessee company had claimed an amount o....