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2010 (10) TMI 668 - AT - Income TaxDisallowance u/s 40(a)(ia) - the expenditure / payment pertains to earlier year - the Tribunal has given a finding that the deduction on account of expenditure acquired on plot for use by workers is to be allowed in the year(s) in which the plots are finally transferred to the workers, the Assessing Officer has the power, and therefore the inherent corresponding duty, under section 153(3) of the Act to recompute the income of that subsequent year to give effect to Tribunal's finding. under section 14A - the issue is now decided in favour of the assessee by the judgment in the case of Godrej and Boyce Limited vs. ACIT (2010 (8) TMI 77 - BOMBAY HIGH COURT), holding that the provisions of section 14A are applicable in such circumstances and the disallowance has to be worked out by the AO on some reasonable basis. Conveyance, traveling expenses, repairs, stationary, misc. expenses, office expenses and presentation expenses - find that the only reason of impugned disallowance is that all the expenses are not supported by third party vouchers, but then that is hardly a reasonable ground for disallowing the expenses. The lack of third party vouchers per se cannot be reason enough for disallowance, but that is precisely the ground on which the CIT(A) has sustained the disallowance. - Claim of these expenditures allowed. commission - the issue is covered in favour of the assessee by the decision of the Tribunal in the case of Smt. Varsha G. Salunke v DCIT,(2005 -TMI - 59416 - ITAT BOMBAY), and, therefore, we see no reasons to interfere in the findings of the CIT (A) in deleting the disallowance of Rs.42,87,733. Accordingly, this ground is dismissed. Loan processing fee -. The processing fees is in the nature of interest and for use of funds borrowed for the purposes of business, and, accordingly, it has to be allowed as deduction under section 36(1)(iii). The limitation under section 37(1) for disallowability of capital expenditure thus is not relevant in the present context. In The Assessing Officer was clearly in error in disallowing the same as capital expenditure, which was not even in the nature of capital expenditure anyway, and the CIT(A) rightly reversed the action of the Assessing Officer. We uphold the action of the CIT(A) and decline to interfere in the matter.
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