2014 (2) TMI 662

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....s by simply stating that disallowance is merely 8.89% of total operating expenses claimed. 2. The ld. CIT(A) has wrongly confirmed disallowance of interest Rs. 1,04,741/- u/s 36(i)(iii) while assessee has categorically stated that no notional income can be taxed.'' 2.2 The Revenue has raised the solitary ground as under:- ''Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in deleting the addition of Rs. 18,70,723/- made by the AO on account of excess depreciation claimed by the assessee on Hydraulic Crane Machine.'' 3.1 Briefly stated, the facts of the case are that the assessee firm derives its income from plying and hiring of cranes. For assessment year 2008-09, it filed its retu....

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....y the ld. AR that all the expenses under this head amounting to Rs. 50,57,571/- is against crane hire charges of Rs. 1,53,15,932/- where the assessee has disclosed net profit rate of 19.14% as against 1.54% for the assessment year 2007-08 and these expenses are fully vouched and justified. It was argued that crane operating charges includes the payment of wages (i.e salary of drives/ helpers), fuel expenses, transportation expenses, repairing expenses, tyre expense, Misc. expenses etc. The submission of the ld. DR is that this is a small disallowance on account of self made vouchers and it deserves to be upheld. 4.4 After considering the rival submissions, it is found that the net profit rate declared by the assessee company is on very v....

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....wer authorities and also filed the written submission while ld. DR has supported the action of the lower authorities. 5.4 After considering the rival submissions, we are of the considered opinion that when the assessee has not paid any interest either on borrowed funds or on the capital of the partners then any sum advanced to the family members of the partners without interest cannot terminate in charging notional interest and making the addition. In this regard, this advance has been made on account of business expediency. Therefore, the decision of Hon'ble Supreme Court of India in the case of S.A. Builders Ltd. vs CIT 288 ITR 1 (SC) would give rescue to the assessee. The Hon'ble Rajasthan High Court has repeatedly held that only real....