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2014 (1) TMI 878 - ITAT CHANDIGARHDisallowance u/s 36(1)(iii) of the Act – Notional interest disallowed – Held that:- In S.A.Builders V CIT [2006 (12) TMI 82 - SUPREME COURT] the principle laid down that where the amount has been advanced for commercial expediency of the person making the advances, then no disallowance is warranted u/s 36(1)(iii) of the Act – here, the assessee has failed to bring on record any evidence to show the commercial expediency in advancing the said amount to M/s Gian Residency Pvt. Ltd. – The decision in CIT V Abhishek Industries [2006 (8) TMI 123 - PUNJAB AND HARYANA High Court] followed - the disallowance u/s 36(1)(iii) of the Act in respect of the investment made with M/s Gian Residency Pvt. Ltd. upheld - Decided against Assessee. Disallowance of interest u/s 40(a)(ia) of the Act – Failure to deposit TDS – Deduction of TDS paid on unsecured loans - Held that:- The decision in CIT Vs. Sikander Khan N.Tunvar & Others [2013 (5) TMI 457 - GUJARAT HIGH COURT] followed - where the assessee has failed to deduct the tax at source and deposit the same within the specified period, the expenditure relatable to such deduction of tax at source would not be allowed as deduction, while computing the income of the assessee - the assessee was liable to deduct tax at source in respect of the interest paid to NBFCs and also interest paid on unsecured loans – the contention of the assessee that the disallowance of notional interest u/s 36(1)(ii) of the Act and the disallowance of interest in view of section 40(a)(ia) of the Act results in double addition cannot be accepted - The total interest expenditure claimed by the assessee was Rs.54 lacs, as against which addition u/s 36(1)(iii) of the Act has been made to the extent of Rs.34 lacs - The balance disallowance has been made by invoking the provisions of section 40(a)(ia) of the Act – Decided against Assessee. Disallowance of 1/10 of Expenses – Vehicle and telephone expenses – Held that:- The disallowance was rejected as the element of personal use cannot be ruled out – Decided against Assessee.
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