TaxTMI 
TaxTMI 
2019 (5) TMI 1317
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.... Rs. 16,62,690/-. 2. The Ld. CIT(A) has erred in confirming the disallowance by AO of interest paid expenses of Rs. 11,18,006/- u/s. 36(1)(iii) of the Act. 3. The Ld. CIT(A) has erred in confirming the disallowance made by AO of Rs. 6,85,300/- on account of rent expense payment. 4. The order of the Ld. CIT(A) is against law and facts of the case. 5. The appellant craves the right to add, amend or withdraw any grounds of appeal at the time of hearing. 2. The brief facts of the case are that Assessee e-filed his return of income on 29.11.2014 declaring income of Rs. 16,62,690/-. The case of the assessee was selected for scrutiny under CASS and notice u/s. 143(2) of the Income Tax Act, 1961 (in short "Act....
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.... whom rent has been paid. But vide its rely dated 19.12.2016 the AR inter alia submitted that in respect of factory rent it is being clarified that the rent payment has been paid to different persons because all these having right in the property but the property being the ancestral property and is located in the Lal Dora area so the shares of the owners has not been transferred to them through registered deed. Factory rent has been paid to the following individuals and payment to each person is below the threshold limit for TDS deduction, therefore, no TDS has been deducted from rent payment and no lease agreement is available. AO further observed that since the assessee has failed to file any documentary evidence regarding rent/ lease dee....
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....at the expediency is there and in case the same is not acceptable than the advances to the extent of capital of the assessee i.e. Rs. 2576086/- can be held to be out of the interest free funds available to the assessee and in support of this contention, he relied upon the decision of the Hon'ble Supreme Court of India in the case of SA Builders Ltd. vs. CIT and the decision of the Hon'ble Punjab and Haryana High Court in the case of Stainless Steel Inds. vs. CIT 324 ITR 396. Further with regard to addition of Rs. 6,85,300/- on account of factory rent expenses is concerned, Ld. counsel for the assessee submitted that the parties have legal right in the property on which the factory of the assessee is running, however, the said building is an....
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....ancing the loan and at no point of time this OD account have any credit balance. Hence, it is evident that the interest bearing funds were used for the purposes of giving advance for non business purposes. Therefore, the disallowance was made by the AO was accordingly rightly confirmed by the Ld. CIT(A), which does not need any interference on my part, hence, the ground no. 2 is dismissed. 5.1 As regards disallowance of Rs. 6,85,300/- on account of rent payment is concerned, it is noted that assessee had failed to furnish any documentary evidence with regard to his claim of payment of rent to the 7 persons as recorded in the assessment order. No evidence of ownership of the property by these persons was furnished. The assessee had als....