TaxTMI 
TaxTMI 
2013 (4) TMI 260
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on the facts and in the circumstances of the case, CIT(A) erred in restricting the disallowance of Rs.68,110/- made by the AO out of Car expenses to Rs.30,000/- CIT(A) should have deleted the entire disallowance of Rs.68,110/- made by the Assessing Officer. 2.2 That on the facts and in the circumstances of the case and without prejudice to the generality of ground of appeal no.2.1 above, the disallowance of Rs.30,000/- made by the CIT(A) is highly excessive. 3.1 That on the facts and in the circumstances of the case, CIT(A) erred in restricting the disallowance of Rs. 24,449/- made by the AO out of Telephone expenses to Rs,10,000/- CIT(A) should have deleted the entire disallowance of Rs.24,449/- made by the AO. 3.2 That on the facts and in the circumstances of the case and without prejudice to the generally of ground of appeal no.3.1 above, the disallowance of Rs. 10,000/- made by the CIT(A) is excessive, 4.1 That on the facts and in the circumstances of the case, CIT(A) erred in restricting the disallowance of Rs.20,000/- made by the AO out of freight & Cartage and traveling expenses to Rs, 15,000/- CIT(A) should have deleted the entire disallowance of Rs.20,000/- ma....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... loan account to meet his day to day business exigencies and requirements. On behalf of the assessee, it is also submitted that the interest @8% are being received from J.K. Paper Ltd. of which the assessee is a distributor and the deposit given to that company is a mandatory and necessary part of business contract with M/s J.K. Paper Ltd. Therefore, this percentage cannot be considered for disallowing a part of interest paid on unsecured loan. 5. The counsel for the assessee has drawn our attention towards a computation chart of expenses and submitted that the interest on unsecured loan @16.5% have been allowed by the Assessing Officer during the preceding years i.e. 2007-08 and 2008-09 and on the principle of consistency during the year under consideration, the assessee is entitled to full allowance of interest paid on unsecured loan and disallowance in this regard cannot be held as justified. 6. Replying to the above submissions, ld. DR submitted that the assessee paid interest @16% per annum on unsecured loans received from his family members which is on the higher side as per generally applicable bank interest i.e. @12% per annum. The DR further submitted that the Commis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m interest to M/s JK Paper Ltd. if payment is delayed beyond 30 days. In this situation, we are inclined to hold that the addition made by the Assessing Officer and confirmed by the Commissioner of Income Tax(A) is not sustainable in the peculiar facts and circumstances of the case. Accordingly, ground no. 1.1 and 1.2 are allowed and addition made in this regard is deleted. Ground no. 2.1 & 2.2 9. The counsel for the assessee submitted that the Commissioner of Income Tax(A) erred in restricting the disallowance of Rs.68,110 made by the Assessing Officer out of car expenses to Rs.30,000 and the Commissioner of Income Tax(A), Muzaffarnagar should have deleted the entire disallowance. He further submitted that the disallowance of Rs.30,000 is highly excessive because the assessee is maintaining a separate car for his personal use and the expenses claimed in the Profit & loss account pertain to the vehicle exclusively used for business purposes. 10. Ld. DR replied during the preceding year i.e. AY 2006-07, the Commissioner of Income Tax(A) also confirmed the disallowance of Rs.6000 out of car petrol expenses and Rs.8000 out of car depreciation on account of personal use by the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rdingly, ground no. 3.1 and 3.2 are allowed and additions made by the authorities below are deleted. Ground no. 4.1 & 4.2 14. The counsel for the assessee submitted that the Commissioner of Income Tax(A) confirmed a part disallowance of Rs.15000 out of freight and cartage and traveling expenses and Commissioner of Income Tax(A) should have deleted the entire disallowance made by the Assessing Officer. He further submitted that the disallowance made by the Commissioner of Income Tax(A) was highly excessive and without any reason. 15. On bare reading of the assessment order, we observe that the Assessing Officer made a disallowance of Rs.20,000 with an observation that the freight and cartage expenses were either partly vouched or supported by self made vouchers and in absence of proper verification of these expenses in the impugned order, the Commissioner of Income Tax(A) restricted the disallowance to Rs.15,000 with following observations:- "The facts of the case as well as submissions made by the appellant have been carefully considered. It is observed that the AD had made addition of 20,000/- on the ground that some of the vouchers were partly vouched or supported by sel....