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2014 (3) TMI 613 - AT - Income TaxDisallowance u/s 40(a)(ia) of the Act – Proper evidences not furnished - Held that:- The CIT (A) held that the sum are inter-state purchases and section 194C is not applicable - The CIT (A) came to the above conclusion, after verifying the purchase bills and also the confirmations from the concerned parties that these sales were inter-state purchases - A sum of Rs.44,85,686/- comprising of purchase by the assessee from M/s. Ratiram Ramvinod Sarees (P) Ltd, for Rs.41,77,206/- from Shankar Selection (P) Ltd, for Rs.21,430/- and from M/s Roop Ranjan, Ahmedabad for Rs.2,87,668/- are nothing, but inter-state purchases affected by the assessee - The finding of the CIT (A) has not been dispelled by the Revenue in any manner whatsoever – thus, the order of the CIT(A) upheld – Decided against Revenue. Disallowance of rebate and discount – Held that:- Discount and rebate are common in this line of business - Assessing Officer has not doubted the genuineness of the rebate and discount - Assessing Officer made an adhoc disallowance of discount and rebate of a sum exceeding 4% of discount granted in a sale invoice - The CIT (A) after examining the accounts of the assessee had held that the discounts are accounted on the basis of sale bill and reflected in each party's account - The findings of the CIT (A) does not call for any interference – thus, the order of the CIT(A) upheld – Decided against Revenue. Disallowance of interest as not relating to the business – Held that:- The CIT (A) rightly pointed out that disallowance u/s 14A is limited to expenditure attributable towards income which is not liable under the Income Tax Act - The Assessing Officer has not brought out on record any evidence that the interest expenditure has been incurred by the assessee for earning exempted income – thus, the order of the CIT (A) deleting the disallowance of expenditure is upheld – Decided against Revenue.
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