2013 (6) TMI 332

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....ming addition of Rs. 93,300/- in respect of interest paid disregarding provisions of section 36(1)(iii) of Income Tax Act, 1961." 3. Briefly stated relevant facts of the case are that the assessee is engaged in the business of liaison work and merchandising. Assessee filed the return of income declaring the total income of Rs. 6,09,290/-. Assessment was completed u/s 143(3) of the Act and the assessed income was determined at Rs.7,61,190/-. During the assessment proceedings, AO made certain disallowances like car expenses, car depreciation and petrol expenses (Rs. 15,710/-); staff welfare and travelling & conveyance expenses (Rs. 4,749/-) and interest paid on loan (Rs.1,31,441/-) totaling to Rs. 1,51,900/- and details are given in the bo....

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.... interest @ 10% of interest free advances of Rs. 9,33,000/-. Accordingly, he granted relief of Rs. 38,141/-. Para 6 of the CIT (A)'s order is relevant in this regard. Further, Ld Counsel brought our attention to page 9 of the paper book ie a letter dated 29.6.2010 written to the CIT (A) during the first appellate proceedings and mentioned that the interest of Rs. 92,912/- is directly related to the loan of Rs. 11.6 lacs involving Tarachand Kashyap - HUF. The said amount of Rs 11.60 lakhs was utilized for purchase of the business asset. Therefore, the said interest cannot be deemed as interest unrelated to the business. He mentioned that the said amount of Rs. 11.6 lacs was used for the purchase of office premises. In this regard, Ld Counsel....