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2014 (2) TMI 662 - ITAT JAIPURLumpsum disallowance out of total crane operating expenses – Held that:- The net profit rate declared by the assessee company is on very higher side in the year and the expenses are fully vouched and in some cases self-made vouchers are where proper vouches are not possible - adhoc disallowance is not justified - The assessee has disclosed better net profit rate as company to assessment year 2007-08 - When net profit rate has increased in this year, the tallying of percentage wise expenditure in two years is also not justified - the AO has not been able to pinpoint any bogus or fake vouchers or it does not related to the assessee business – thus, the expenses have to be allowed – Decided in favour of Assessee. Disallowance u/s 36(i)(iii) of the Act – Held that:- When the assessee has not paid any interest either on borrowed funds or on the capital of the partners then any sum advanced to the family members of the partners without interest cannot terminate in charging notional interest and making the addition - the advance has been made on account of business expediency – Relying upon S.A. Builders Ltd. vs CIT [2006 (12) TMI 82 - SUPREME COURT] - only real income is to be taxed - When interest bearing funds have not been diverted then such notional disallowance is not justified – thus, the disallowance made u/s 36(1)(iii) is not justified – Decided in favour of Assessee. Deletion made on account of excess depreciation – Held that:- Numerous pieces of evidences have been filed by the assessee in support of its claim which includes RTO registration wherein the cranes are registered under the head 'Truck Crane' which shows that crane is mounted on vehicle - A certificate of the Distt. Transport Officer, stating the crane registered under Vehicle No. for which fitness is not required – thus, there was no infirmity in the order of the CIT(A) – Decided against Revenue.
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