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2023 (9) TMI 1346 - AT - Income TaxExpenditure claimed under the head marketing staff commission and site development expenses - balance amount of 5% of the addition restricted by the Ld.CIT(A) - HELD THAT - As find from the order of the CIT(A) that the assessee has not produced any verifiable documents before the Ld.CIT(A) also. CIT(A) has therefore held that since the self made vouchers are not completely verifiable and since the assessee has not proved beyond doubt that the said expenditure is genuine, he directed the AO to restrict the disallowance to 5% - assessee failed to provide any genuine vouchers before me. In the absence of cogent evidences produced either before the revenue authorities or before me, find that no intereference is therefore required on this ground. Hence, sustain the order of the Ld.CIT(A) on this ground. Disallowance of cash payments u/s 40A(3) - HELD THAT - AR did not bring any material or confirmation from the vendors to substantiate that there is any business expediency for making payments in cash for purchase of the lands. Further, observe that the payments have been made by way of banking channels and also by cash and hence, the argument of the Ld.AR that the vendors are agriculturists and therefore, the amount is exempted under Rule 6DD of the IT Rules is not sustainable. As find from the order of the CIT(A) that the payments were not made on bank holidays to the vendors. No material was also placed before me, substantiating the business expediency of the vendors for the payment made by cash for purchase of lands. we inclined to confirm the order of the CIT(A) on this ground. Powers of the Joint Commissioner (Appeals) or Commissioner (Appeals) u/s 251(1A) - HELD THAT - CIT(A) has rightly, after considering the materials on record and by exercising powers vested in him u/s 251(1)(a) of the Act, enhanced the assessment. Therefore, find no infirmity in the order of the Ld.CIT(A) and the ground raised by the assessee is dismissed
Issues Involved:
1. Condonation of delay in filing appeal due to Covid pandemic and lockdown. 2. Disallowance of expenditure claimed under marketing commission and site development expenses. 3. Disallowance of cash payments made for purchase of land. 4. Enhancement of assessment by the Commissioner of Income Tax (Appeals). Summary: Issue 1: Condonation of Delay The appeal was filed with a delay of 175 days due to Covid-19 lockdown. The appellant submitted an affidavit for condonation of delay, citing the pandemic as the reason for missing the deadline. The Tribunal found sufficient cause for the delay, considering the extended time limit granted by the Hon'ble Supreme Court due to the pandemic. The appeal was treated as filed within the limitation period and admitted for hearing. Issue 2: Disallowance of Expenditure The appellant claimed expenses under marketing commission and site development, but failed to provide verifiable documents to prove the genuineness of the expenditure. The Assessing Officer disallowed 10% of the claimed expenditure, which was upheld by the Commissioner of Income Tax (Appeals) at 5% due to lack of sufficient evidence. The Tribunal sustained the decision, as the appellant did not produce genuine vouchers to support the expenses. Issue 3: Disallowance of Cash Payments Cash payments totaling Rs. 9,20,000 were made for the purchase of land, with the appellant justifying the cash transactions as per agreements with the vendors. However, the Tribunal found no business expediency for the cash payments and upheld the decision of the Commissioner of Income Tax (Appeals) to disallow the amount under section 40A(3) of the Income Tax Act. Issue 4: Enhancement of Assessment The Commissioner of Income Tax (Appeals) enhanced the assessment by making additions to the original assessment. The Tribunal noted that the Commissioner had the power to enhance the assessment under section 251(1A) of the Act. As the Commissioner exercised this power after considering the materials on record, the Tribunal dismissed the appellant's challenge to the enhancement. In conclusion, the appeal filed by the assessee was dismissed by the Tribunal, and the order was pronounced on 1st June 2023.
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