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2024 (3) TMI 722 - ITAT JODHPURLumpsum disallowance of certain expenses to cover up the possible leakages of revenue in net profit - said expenses are inflated, non-business & personal nature as per his convenience - assessee has paid the expenditure in cash and the same are merely self made kaccha bill and the genuiness of these bills are cannot be compared with the registered dealer when paid with cheque - HELD THAT:- The bench noted that the expenses supported by self-made slips of employees and kaccha bills of local traders do not mean that these expenses are not genuine or could not be verified when there is no observation of a single instance in the order of the lower authority. In fact kachha bill itself suggest the necessity and urgency of the expenditure and therefore we are of the considered view that it is in correct perspective in as much as there is no qualification by the Chartered Accountant and during assessment proceedings ld. AO has not pointed out any single irregularity/ inaccuracy in the vouchers produced by the assessee. Thus there is no need to sustain the lumpsum disallowance of Rs. 5 lac. We derive support from the case of ACIT Vs. Ganpati Enterprises Ltd. [2013 (12) TMI 1097 - ITAT DELHI] where in held that “The findings extracted nowhere reveals what was the total amount of expenditure claimed by assessee, which specific voucher was not in accordance with law. In a just sweeping statement, AO observed that on verification, some of the expenses were found to be unverifiable, but what were those expenses, he should make out in the assessment order, only then he can disallow them. Therefore, the said disallowance was to be deleted.” Ground no. 1 raised by the assessee is allowed. Addition of interest against interest free loans - as argued assessee has sufficient non-interest bearing fund available in the books of accounts - HELD THAT:- Assessee has sufficient non-interest bearing funds to give advance to its members and the interest received is more than the interest paid. Thus, as respectfully following the finding recorded by Reliance Industries Ltd. [2019 (1) TMI 757 - SUPREME COURT] wherein it has been held that Tribunal having found that the interest free funds available to the assessee were sufficient to meet its investment, it could be presumed that funds were given to subsidiaries out of interest free funds and therefore, interest referable to funds given to subsidiaries is allowable as deduction u/s 36(1)(iii). Considering that aspect of the matter and when it is very much clear that the assessee is having sufficient interest free fund no notional interest be disallowable. In terms of these observations ground no. 2 raised by the assessee is allowed.
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