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2017 (4) TMI 1596 - ITAT AHMEDABADDisallowance on account of interest expenses to Naksha Impex - A.O. was of the opinion that the interest paid to Naksha Impex was quite higher than the rate of interest paid to bank as well as paid on other unsecured loans. Accordingly, the assessee was asked to justify the claim of interest - CIT-A deleted the addition - HELD THAT:- Before us, the ld. D.R. simply relied upon the findings of the A.O. without bringing any factual error in the findings of the ld. CIT(A). There is no dispute that the A.O. has not given any adverse findings so far as utilization of borrowed money from M/s. Naksha Impex is concerned. It is also true that Naksha Impex is not a related party and, therefore, provisions of Section 40A(2)(b) of the Act are not applicable. We agree with the First Appellate Authority that for the purposes of the allowance of interest u/s. 36(1)(iii) of the Act, all that the A.O. has to consider is whether the money borrowed is utilized for the purposes of business or not. Since, no adverse findings is given, we decline to interfere with the findings of the ld. CIT(A). Nature of expenditure - payment paid to Vishnu & Company Trade Mark Pvt. Ltd. for use of trade mark - revenue or capital expenditure - HELD THAT:- There is no dispute that the “Vimal” Trade Mark is owned by Vishnu & Company Trade Mark Pvt. Ltd. It is also true that the assessee has paid the royalty as per the terms and conditions of the registered agreement. It is equally true that the CBDT circular No. 10/69/61-IT(AI) dated 04.09.1962 is not applicable in the instant case. We further find that in the immediately preceding assessment year, similar payments were allowed by the A.O. in scrutiny assessment. Considering the facts in totality, we do not find any reason to interfere with the findings of the ld. CIT(A). Ground no. 2 is accordingly
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