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2015 (5) TMI 673 - ITAT CHANDIGARHDisallowance expenditure under section 40A(3) - assessee has paid cash for purchase of land to certain persons - Held that:- It is not doubted that in the agreement to sell it was agreed that sale deed would be executed, i.e., registered on or before March 28, 2010 and the assessee was required to make full payment before that date. Later on, it was found that March 28, 2010 fell on Sunday, naturally nobody would like to leave the land deal, therefore, the assessee paid cash on that date. We are not impressed by the contention that the assessee should have made the payment before that date. When a particular agreement provides for a payment on or before a particular date, it is not necessary that just to meet the technical requirement of Income-tax provisions, payment should be made earlier. Payment has been made on March 28, 2010 which falls on a Sunday and is squarely covered by the exception provided under rule 6DD(j) which has been extracted by the Assessing Officer above. Further, the sale deed was also executed on March 30, 2010. Therefore, in our opinion, the cash payment would covered by the exception under rule 6DD(j) and accordingly we set aside the order of the learned Commissioner of Income-tax (Appeals) and delete this addition. - Decided in favour of assessee. Disallowance u/s 36(1)(iii) - no interest charged on advance given to sister concern - Held that:- The Assessing Officer has fairly restricted the disallowance at ₹ 4,79,230 which was amount of interest claimed by the assessee. The proportionate disallowance is totally in consonance with the decision of the of CIT v. Abhishek Industries Ltd. [2006 (8) TMI 123 - PUNJAB AND HARYANA High Court) wherein held that the assessee will not be entitled to claim deduction of the interest on the borrowings to the extent those are diverted to sister concerns or other persons without interest, therefore, we find nothing wrong with the order of the learned Commissioner of Income-tax (Appeals) and confirm the same. - Decided against assessee.
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