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2010 (5) TMI 753 - ITAT AHMEDABADDisallowance of reimbursement of medical expenses – Held that:- The assessee being a company, the expenditure could not be held as personal expenses of the company as directors were appointed for the business purposes of the company – relying upon Sayaji Iron & Engg. Co. Vs. CIT [2001 (7) TMI 70 - GUJARAT High Court]- no material was brought on record to show that such payment was not in accordance with the terms of employment of Directors and was not authorised by the Board specially keeping in view that similar reimbursement was allowed in the immediately preceding year - no disallowance in the hands of the assessee company can be made on the ground that any amount of perquisite which was taxable in the hands of Director employee was not shown by such employee Director in his return of income - the action of the department should be against the said employee Director and not in the hands of assessee company- thus there is no reason to interfere with the order of the CIT(A) – Decided against revenue. Proportionate disallowance of interest – Interest free advances – Held that:- Revenue could not point out how the advances given to different persons were not business advances of the assessee. In absence of any material brought on record, tribunal confirmed CIT order that the above advances were for the business purpose of the assessee and no disallowance of interest in respect of such interest free business advances can legally be made - interest free funds available with the assessee company was much more than interest free advance given to Karnataka Jewels Ltd. and no material on record to show that there was a nexus between interest bearing funds and interest free advance to the said Karnataka jewels Ltd.- the order of CIT(A) upheld - Decided against revenue.
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