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2016 (4) TMI 754 - ITAT DELHIDisallowance on account of interest - Held that:- If the money is utilised in a way that makes commercial sense and helps in running the business of the assessee more efficiently, then it can be said that the interest paid in respect of the borrowed money has been incurred for the purposes of commercial expediency. Moreover, the Ld. AR has demonstrated that as per the Balance sheet, the assessee had a capital of ₹ 2.73 crores and the profit for the year was ₹ 16.94 lacs. These figures, in our opinion, were sufficient to meet the investment requirements as well as the amount given as advance to M/s Victory Enterprises. These facts were before the Ld. CIT (A) also but he has not specifically dealt with them in the impugned order. Therefore, on an overall view of the facts of the case and in the case of S.A. Builders Ltd. vs CIT (2006 (12) TMI 82 - SUPREME COURT ) we direct the Assessing Officer to delete the disallowance of ₹ 54,477/- on account of interest. - Decided in favour of assessee Disallowance on account of 1/5th of the telephone expenses - Held that:- Looking into the quantum of disallowance as well as a specific prayer of the assessee that the quantum of disallowance may be fixed at 1/10th, we feel that it would serve the interest of justice if the disallowance is restricted to 1/10th of the total telephone expenses. - Decided in favour of assessee Value of sales consideration for the purposes of section 50C - capital gain computation - Assessing Officer as well as the Ld. CIT(A) have doubted the veracity of the ‘Ikrarnama’ or the ‘Agreement’ on the ground that the same is signed by only one person whereas the land has been finally sold to three parties - Held that:- In the case of K.K. Nag Ltd. vs. ACIT (2012 (6) TMI 184 - ITAT PUNE ) after detailed discussion of the provisions laid down u/s 50C of the Act has held that the discretion granted in such a situation is required to use in a judicious manner. Section 50C is a deeming provision and ostensibly involves creation of an additional tax liability on the assessee and, therefore, notwithstanding the presence of the expression ‘may’ in section 50C (2)(a), the AO in this case ought to have referred the matter to the valuation officer for ascertaining the value of the capital asset in question. The order of the Commissioner (Appeals) was thus held to be set aside and the AO was directed to adopt the course mentioned in section 50C (2)(a) and thereafter proceed to determine capital gain on sale of land and building. Respectfully following the ratio of decisions as above, we, while setting aside the orders of the authorities below on the issue, direct the AO to adopt the course mentioned in section 50C(2)(a) and thereafter, proceed to determine capital gain on sale of the properties in question after affording opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes.
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