2018 (2) TMI 1642

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....ional interest on alleged interest free loans given by the assessee without appearing the facts on record in as much as he has failed to appreciate that the advances given were covered by own funds and there was no nexus between the advances given and the borrowed funds. 2. That the Learned CIT(A) erred on facts & in law in confirming 15% disallowance amounting to Rs. 57,463/- out of conveyance & telephone expenses in a routine manner on ad hoc basis. 3. That the Learned CIT (A) erred on facts & in law in confirming ad hoc addition of Rs. 30000/- out of Staff Welfare, Miscellaneous Expenses and Travelling Expenses. 4. That the Learned CIT (A) erred on facts in law in confirming adhoc addition and disallowances mad....

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....ined by learned CIT(A), Learned A. R. submitted that the Assessing Officer had made ad hoc disallowance without pointing out any defect in the vouchers or pointing out any specific instance. It was submitted that the Assessing Officer has merely acted on presumptions. As regards the expenses on vehicle maintenance, Learned A. R. submitted that the entire expenses were incurred for repair and maintenance and were fully vouched and therefore, the disallowance was not warranted. Similarly, in respect of ad hoc addition of Rs. 30,000/- out of staff welfare, misc. expenses and travelling expenses, Learned A. R. submitted that the entire expenditure was open to strict verification and Assessing Officer has merely acted on presumptions while recor....

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....ts, the interest even though not actually charged had accrued as income and therefore was liable to pay tax. The Revenue took a specific stand that as the assessee had not taken any interest on the advances made by her to MG and M, proportionate interest which the assessee could have realised from these two firms and which had not been realised should not be allowed under section 36(1)(iii) . If the assessee had sufficient funds other than the borrowed money for giving the amount as loan to any other concern, the conditions of section 36(1)(iii) of the Act had been complied with and the assessee was entitled to full allowance of the amount of interest paid by it on borrowed capital. Therefore the Tribunal was not justified in confirming the....

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....nditure on the ground that the assessee failed to maintain A call book for monitoring calls and that a part of such calls were for personal and non-business use. The assessee also claimed expenses of the Mumbai office, part of which were supported by internal debit vouchers and claimed general expenses and expenses towards tea and tiffin, supported by debit vouchers. The Assessing Officer, disallowed 20 per cent. of expenses on the ground that they were not verifiable. The Commissioner (Appeals) confirmed this. The Tribunal restricted the disallowance. On appeal: Held, that it was not the case of the Assessing Officer that the assessee was unable to adduce satisfactory evidence that the expenditure was incurred for the purpose of h....