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2016 (5) TMI 170 - ITAT MUMBAIDisallowance u/s.14A - Held that:- No infirmity in the order of CIT(A) for excluding the strategic investment made in the joint venture business projects while computing disallowance under rule 8D(ii).- Decided in favour of assessee Disallowance u/s.37(2B) - donation to Bharatiya Janata Party - Held that:- The assessee has not given any advertisement in souvenir of the political party therefore not hit by the provisions of section 37(2B). Since the expenditure was incurred wholly and exclusively for the purpose of business and was not in personal nature, there was no justification for disallowing the same. Accordingly, we confirm the order of CIT(A) on this issue. - Decided in favour of assessee Disallowance of interest - CIT(A) allowed the claim - Held that:- none of the borrowed funds have been utilized for giving interest free loans to either blood relative or friends. Whatever advances have been given were out of own capital. This fact is verifiable from the enclosed balance sheet of the assessee. The finding of fact recorded by CIT(A) are as per material on record, therefore, does not require any interference on our part. Accordingly, we confirm the action of the CIT(A) following the decision of jurisdictional High Court in the case of Reliance Utilities Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] - Decided in favour of assessee Adhoc disallowance on telephone expenses, vehicle expenses etc. - Held that:- We have considered rival contentions and found that personal element in such expenses cannot be ruled out. Therefore, keeping in view the totality of facts and circumstances of the case, we restrict the disallowance to the extent of 10% of such expenses. - Decided in favour of assessee partly Addition on account of alleged non-genuine purchases of the assessee - Held that:- All the materials were supplied at the site of the execution of work, payment of which were made by account payee cheque. We also found that when the work was being executed the site has been visited by the engineers of BMC to check the progress and validity of the work. The MCGM is also having its own inhouse vigilance department to check the quantity and quality of the work done. Only after satisfying with the quantity and quality of work done, the payment was made by the assessee, therefore, it cannot be said that assessee has not purchased the goods, because without purchase, it was not possible to execute work allotted. From the record we also found that assessee has appointed project manger for each site. As per the terms of the contract, assessee has to erect a readymade site office of for MCGM staff before commencing of the work and the has to set up a laboratory before commencing of work, for which quality control engineer has to be appointed. The assessee had also sent samples of all the materials received at site to municipal staff laboratory under sub engineers signature. The CIT(A) has dealt with great detail of the statement dated 2-5-2012 as recorded by the AO and reply filed by the concerned parties. After recording detailed finding the CIT(A) has applied the proposition of law laid down by various High Courts and came to the conclusion that assessee’s actual purchase of material by the assessee and disallowing the same was not justified. The detailed finding recorded by CIT(A) are as per material on record, which has not been controverted by ld. DR by bringing any positive material on record. Accordingly, we do not find any reason to interfere in the finding recorded by CIT(A) resulting into deletion of addition on account of purchases. - Decided in favour of assessee
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