TaxTMI 
TaxTMI 
2025 (6) TMI 1137
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....e case, Ld. CIT(A) erred in deleting addition of Rs. 8,38,412/- ignoring the fact that in absence of party wise details and bills of expenses, applicability of section 40A(3) of the I.T. Act could not be known. 3. That, in facts and circumstances of the case, Ld. CIT(A) erred in deleting addition of Rs. 20,233/- ignoring the fact no evidences have been filed by the assessee in support of the claim that all these domestic travel expenses were incurred for wholly & exclusively for business purpose within applicability of section 37 4. That, in facts and circumstances of the case, Ld. CIT(A) erred in deleting addition of Rs. 1,90,15,785/- ignoring the fact that registered deed for said property is stating nature of land being agricultural and assessee's contention of farm house was found to be incorrect & wrong as per Inspector's report 5. The assessee craves, leave to add, alter or amend any of the grounds of appeal before or during the course of hearing of the appeal." 3. Heard and perused the records. Ground No.1; In regard to this ground it can be observed that the assessee has shown agricultural income of Rs. 7,25,300/- which has been claimed as exem....
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....nt evidences of earning agricultural income by a person who owns more than 40 acres of land. The assessee has filed the two copies of Form J issued by M/s Dhingra Bros., for which there is no allegation, on basis of enquiry that same is not genuine. The emphasis on proving the same by purchase of seeds, electricity expenses, etc., is stretching too far the scope of inquiry and doubting the income. More so, when in the proceeding years as well as in subsequent years the agricultural income from the same land was accepted. The findings of the CIT(A) require no interference. The ground has no substance. 4. Ground No. 2: The assessee has debited finishing charges of Rs. 1.56 Crore in profit and loss account which includes sampling expenses of Rs. 16,76,824/-. The AO has asked the assessee to furnish detail of these expenses with necessary evidences and details of TDS on these expenses. It is observed by the AO that assessee has made most of the payments in cash with no detail of nature of expenses or supplier details on ledger account. The assessee failed to furnish evidences that these expenses were incurred wholly for the purpose of business therefore AO has disallowed 50% of thes....
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....basis at Rs. 8,38,412/- and addition made by the AO is hereby deleted." 6. Very apparently, the ld.CIT(A) has taken a reasonable call on the basis of evidences that the expenditure commensurate with the nature of work. Sampling expenses were required for procurement of the orders with regard to different households and furnishing articles manufactured by the assessee. Thus, sampling work is of the nature which is recurring and got done on urgent basis. Therefore, ad hoc disallowance in such circumstances were not justified. The findings of the ld.CIT(A) require no interference. The ground has no substance. 7. The ground No.3: The assessee has claimed the staff welfare expenses at Rs. 1,63,578/-, business promotion expenses at Rs. 1,76,691/- and telephone expenses at Rs. 2,58,903/- totaling to Rs. 5,99,172/-. The AO has asked the assessee to furnish the detail of expenses and justify that expenses were incurred wholly and exclusively for the purpose of business activities. It is observed by the AO that staff welfare expenses were incurred on tea snacks, lunch, dinner etc. which have been claimed for business purposes. The business promotion expenses were incurred for various k....
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....ation is annexed for your ready reference) Also note that the assessee had duly provided the set of complete bills of Staff welfare and business promotion expenses vide submission dated 09.03.2015. Kindly note that the assessee has provided all the documents and details as & when required by the assessing officer and nothing was rejected. The assessing officer does not contend the genuineness of the books of accounts or the expenses incurred. The assessing officer did not point out even a single rupee as disputed amount or entry. None of the balances or entries was highlighted as disputed or unacceptable. The learned assessing officer has not pointed out a single expense in the books of accounts which could be treated as expenditure which is non-business in nature. In fact all the bills/vouchers related to Staff welfare & business promotion had been produced in original in front of the assessing officer on 09.03.2015& nothing was rejected. If the assessing officer wished for more information or documents, he should have communicated it to the client. The assessing officer was provided all that he asked for. Hence the contention that expenses are not wholl....
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....the specific travel taken by the assessee was not for business purpose, ad hoc disallowance was not justified. The assessee is in a business where for procurement of orders and certainly for business promotion, the assessee may require frequent travelling. No defect in the books and vouchers have been pointed out nor they are doubted to be not genuine. Thus, the findings of the ld.CIT(A) require no interference qua the deletion made. 9. Ground no. 4; We find that during the year assessee has shown capital gain of Rs. 1,90,15,785/- and claimed deduction amounting to Rs. 1,90,15,785/- u/s 54 and 54F of the Act. It is observed by the AO that assessee has purchased a property of total land 17 Kanal 7 Marla situated in the revenue state of village Balola Tehsil Sohna Distt. Gurgaon for which assessee claimed deduction u/s 54 that the above property is actually agricultural land. The AO has reproduced the last para of page 2 of the purchase deed and third para of page 3 of the purchase deed and observed that from the sale deed it is ample clear that total agricultural land measuring 2 acre 1 kanal and 7 marla was purchased by the assessee and in no way such a large portion of agricult....
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....ince the property in question is situated within 100 fts. from the local limits of Sohna municipality and also the population of the municipality is 27,570, hence the same cannot be treated as agricultural land. Further, the property not only consist of large portion of land but is also a dwelling unit consisting of 2 rooms for residence & a washroom along with electricity, water connection & other basic amenities. Ld. CIT(A) concluded as follows; 9.5 It is seen that in view of the provisions of Section 2(14)(iii) of the IT Act 1951, the said land is clearly not an agricultural land. Further in the case of assessee remand report is called for after verifying the contention of the assessee that property as per the certificate of Tehsildar is at a distance of 2 kilometer from the Municipal limits of Gurgaon and consists of 2 rooms and one bathroom. The remand report is submitted by the AO vide letter dated 01.05.2018 in which AO has reported that Shri Vikas Dahiya, ITI, visited Khewat No. 273, Khatauni No. 283 Rect. No. 13 Kila No. 21/1 (2-10) Rect. No. 14, Kila No. 25(8-0) Rect. No. 15 Kila No. 5/1 (4-11) Rect. No. 16 Kila No. 1/1/1 (2-6) field 4 total land 17 Kanal 7 Marla....