2016 (4) TMI 1009

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....ricting interest at the rate of 13% against 15/18% claimed by the assessee which has been actually paid is totally wrong, bad in law and needs to be quashed. The AO has failed to bring any evidence on record that the assessee has not paid the interest claimed by him. The CIT(A) has also failed to appreciate that bank gives money against security and interest is always payable to the bank of day to day basis whereas assessee has been paying interest on yearly basis. 2. That the Order of the Learned CIT(A) in confirming sum of Rs. 53,558/- out of expenses claimed by the assessee on account of various expenses such as Car Insurance, Car Depreciation, Telephone Expenses, Vehicle Maintenance and interest on Car Loan is totally wrong, bad in l....

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....rate is more than 13% p.a. by taking appropriate security and loan processing and OD Charges. The assessee firm has arrange loan from outsider parties other than banks to promote the more sales and Arhat Income and to get better profits. Assessee Firm has not so much Goodwill to get the cheaper loans below 15% p.a. That the Assessee Firm is earning much more than interest paid. The Assessee Firm declare Net Income of Rs. 4,60,085/- after allowing remuneration of Rs. 9,15,000/- and interest of Rs. 1,20,038/- to partners as compare to last year Net Income of Rs. 3,02,541/- after allowing remuneration of Rs. 6,77,500/- and Interest of Rs. 1,18,695/- to partners. That interest is not the burden on the firm. Firm is earning more even af....

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....aid interest at the rate 18%. This decision has been made view the decision of Sh. G.D. Aggarwal, VP of ITAT Ld. In the case of Vipul Y. Mehta. Further please note that AO has not brought any evidence on record regarding the reasonableness of interest @ 12%. We you will agree and appreciate that the assessee hasn't paid excess interest at all and therefore the addition made by the AO has no merit and must be deleted." 7. The ld. CIT(A) after considering the submissions of the assessee observed that the contention of the assessee was partially correct. He further observed that the assessee agreed that even in the banks money lending rate is about 13%. The ld. CIT(A) restricted the payment of interest to the lenders @ 13%. 8. Now the as....

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....tes to the confirmation of disallowance of Rs. 53,558/- out of various expenses. The facts related to this issue in brief are that the AO during the course of assessment proceedings noticed that the assessee had incurred the following expenses: i) Car Insurance Rs. 15,232/- ii) Car Depreciation Rs. 1,19,574/- iii) Telephone Expenses Rs. 1,07,983/- iv) Vehicle Running & Maintenance Rs. 1,21,200/- v) Interest on car loan Rs. 25,001/-   Total Rs. 3,88,990/-   The assessee suo motu disallowed 1/5th of the vehicle running and maintenance expenses on account of personal use of partners and thus, disallowed a sum of Rs. 24,240/-. However, the AO disallowed Rs. 77,798/- being 1/5th of all the expenses and af....