2015 (10) TMI 997

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....) Because the Ld. CIT(A) has wrongly and illegally confirmed the addition of Rs. 1,25,000/- made by the Assessing Officer on interest free loan to M/s Uma Overseas by disallowing the same out of interest payment. (ii) Because considering the facts of the case the addition of Rs. 1,25,000/- as confirmed by Ld. CIT(A) is legally wrong and deserves to be deleted. 2(i) Because the Ld. CIT(A) has erred both in law and on facts in making an enhancement of Rs. 78,000/- u/s. 36(1)(iii) of the I.T. Act on interest free loan/advance given to Smt. Mamta Agarwal. The enhancement made is unjustified ignoring the appellant's submission. (ii) Because considering the facts of the case the enhancement of Rs. 78,000/- made by Ld. CIT(A) is legally w....

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....e funds available to an assessee are in excess of the non business investments or interest free advances, presumption has to be that investments or interest free advances are out of interest free advances, and, accordingly, disallowance in respect of interest paid on borrowings cannot be made on the ground that the borrowed monies have not been used for business purposes. In this view of the matter, and having regard to the facts and figures cited before us which are not disputed by the learned Departmental Representative, we uphold the grievance of the assessee. The impugned interest disallowances are, accordingly, deleted." 4. Learned D.R., however, relied upon the stand of the authorities below. 5. Having heard the rival contention....

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.... like conveyance expenses of Rs. 45,290/- & Generator repair exp. of Rs. 16,425/-, repairs and maint. of Rs. 14,206/-, office expenses of Rs. 67,731/-, sales promotion expenses of Rs. 59,116/-, staff salary of Rs. 34,730/-, consumable stores of Rs. 43,978/- consisting of purchase of Dhoti, file and tubes and chemicals etc. And further the assessee has shown payment of wages of Rs. 5,08,320/- during the year, which was Rs. 1/72 lacs last year and the same have been made in cash and the assessee has got self made vouchers and did not submit the PAN etc. of the labour. Therefore, the same is not fully verifiable, as labour migrates and the authenticity is doubtful. This expense seems to be quite excessive as compared to the last year. As th....