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TMI Blog2014 (8) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... e difference in signatures, which explanation was not accepted by the AO during the assessment proceedings - Except for not accepting the explanation given by the appellant, no other cogent material has been brought on record by the AO in making the impugned addition - there was confirmation from the assessee’s brother-in-law of the various amounts given to him - Since the source and the identity were established, there is no need to treat the amount as unexplained cash credit – Decided against revenue. Restriction of development expenses – Held that:- There was no reason to interfere with the order of the CIT(A) - there is no basis for disallowing the entire development expenditure when assessee is in the business of plot development and sale thereafter - CIT(A) restricted the amount to 10% of the expenses incurred - Even though, the disallowance of expenditure is made under section 37(1) nothing was brought on record by Revenue why the entire amount should be disallowed – thus, the order of the CIT(A) is upheld – Decided against Revenue. Commission on sales to representatives – Held that:- There was no reason to interfere with the order of the CIT(A) - Payment of commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is aggrieved on two issues i.e., addition of ₹ 1,90,000/- made on account of advances received as unproved credits and gift of ₹ 3,70,000/- received from his brother-in-law through others. 4.1. As far as addition of ₹ 1,90,000/- is concerned, A.O. made addition shown by the assessee as advance received for sale of plots as unsecured loan in the absence of confirmation as such as income. It was the submission before the Ld. CIT(A) that assessee filed confirmation letters who confirmed that they gave advances for purchase of plots, before the A.O. Moreover, at no stage of assessment proceedings, A.O. asked the assessee to produce such confirmations. Considering the submissions of the assessee, the Ld. CIT(A) deleted the addition by stating as under : 11.2. I have considered the submissions made by the appellant, gone through the order of the AO. Here there are two aspects to be considered. One is that the AO has not asked for the details of the persons from whom advances have been received. I have nothing to suspect the version of the appellant as it is natural to receive advances for purchase of plots, as the appellant's main business is development ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is that in the returns originally filed, the appellant has not admitted property transactions on the ground that such transactions are part of HUF state of affairs. But, however, in the returns filed in response to 148 proceedings, the appellant has reflected property transactions also. Now coming to the question of gifts received during the year, there is no dispute between the relation between the donor and the donee. There is also no dispute that that the said amount has come from the donar's NRE account at the native place of the donor. The only dispute was that the amount drawn was not by the donee, but by somebody else, which is not denied by the appellant. It is explained that the donee has given post dated cheques to his father, who is a small time businessman. As advised by his son, he has sent one of his employees to withdraw the money by submitting post dated cheques and that's why the difference in signatures, which explanation was not accepted by the AO during the assessment proceedings. Except for not accepting the explanation given by the appellant, no other cogent material has been brought on record by the AO in making the impugned addition. Thus, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchase of raw lands till they are made into plots to be sold to prospective buyers. But, however, the fact remains that major expenses were supported by self made vouchers, whose authenticity is not foolproof. But then, for such a situation disallowing entire expenses is also not called for. It is something like income is earned without expending a single paisa. Since majority of expenses were supported by self made vouchers, without ignoring the entire expenditure, a reasonable approach of disallowing a part of the expenditure could have been adopted by the AO, which he has not done. But, however, having regard to the facts, circumstances, nature of the activities involved in development activities and also having due regard to the explanations offered by the authorised representatives, in my considered opinion, ends of justice are met if the disallowance is restricted to 10% of the expenses involved and the AO is directed accordingly. The disallowance is ₹ 2,33,500/-, and the relief in this regard is ₹ 21,01,500/-. 12. After considering the rival contentions, we do not see any reason to interfere with the order of the Ld. CIT(A). In fact, there is no basis for dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , did not intend to interfere with the order of the Ld. CIT(A). Accordingly, ground No.4 of the Revenue is rejected. 15. Ground No.5 contested by the Revenue is with reference to the addition of ₹ 7,40,000/- being amount credited to capital account of the assessee. A.O. noticed that assessee has credited an amount of ₹ 7,40,000/- in his account, therefore, treated the same as income. It was submitted by the assessee that he maintained two sets of books viz., personal and other for the business. The incomes accumulated/received during the year were credited to his personal account including the gift received from his brother- in-law. It was further submitted that assessee has prepared statements of accounts i.e., profit and loss account, statement of affairs as well as capital accounts both for his business and personal and filed before the A.O. during the course of assessment proceedings. There were transfer of funds from business to personal accounts and A.O. considered the transfer as unexplained credit. Considering the explanation of the assessee, the Ld. CIT(A), deleted the same by stating as under : 19.2. I have considered the submissions made by the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X
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