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2013 (9) TMI 677 - ITAT AHMEDABADAddition u/s 68 of the Income Tax Act - capital introduced by the partner - the partner who introduced the capital has confirmed and owned the same – Held that:- Reliance has been placed upon the judgment in the case of CIT v. Pankaj Dystuff Industries [2005 (7) TMI 601 - GUJARAT HIGH COURT], which is squarely applicable in the present case in the hand – The Hon’ble High Court in the said case after examining the principles laid down in the judgment of the Allahabad High Court in the case of CIT v. Jaiswal Motor Finance [1983 (2) TMI 47 - ALLAHABAD High Court] answered the question in the favor of Assessee – Decided in favor of Assessee. Disallowance of Rs.4,96,231/- as interest expenditure - documentary evidence for utilization of partnership capital and borrowed funds to the extent for the purpose of business - Held that:- the question of reasonableness of expenditure is a subjective matter which is to be determined by the assessee who is running a business and it is not expected from the Assessing Officer to step into the issues of a businessman - The business need and the business purpose depends upon the circumstances of each case - Merely because the assessee had maintained cash balances at its several branches being in angadia business should not be a cause of disallowance of interest on borrowed funds - Above order of the hon'ble co-ordinate Bench was not available at the time when the impugned order was passed by the learned Commissioner of Income-tax (Appeals) – Matter remitted back to the file of the learned Commissioner of Income- tax (Appeals) to decide this issue afresh – Decided in favor of Assessee for statistical purpose.
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