TMI Blog2012 (12) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... lf cannot be a ground to disbelieve the advancement of loan of Rs.2,90,000/- to the assessee without making proper enquiry to find out whether the creditor had sufficient cash balance with her to advance the loan - Issue restored back to AO with a direction to make proper enquiry - in favour of assessee for statistical purposes. Excess Remuneration paid to Director - Disallowance u/s 40A(3) - Held that:- As entire amount was paid in cash in violation of provisions contained u/s 40A(3) disallowance of 20% out of the expenditure claimed is warranted - uphold the order passed by the CIT(A)- against assessee. Disallowance of capital loss - Held that:- Appeal proceeding being a continuation of assessment proceeding any omission or mistake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of business. By advancing the money received the assessee has earned interest income of Rs.5,91,564 which has been offered to tax. The assessee further contended that during the remand proceeding when the AO had questioned about non deduction of tax at source on payment of interest, the assessee had furnished declarations in Form 15G from the payee. Therefore, no disallowance could be made of the interest payment. 4. The CIT (A) after considering the contentions raised by the assessee was satisfied that the payment of interest was for the purpose of business. He however disallowed it u/s 40(a)((ia) on the ground that tax was not deducted at source on the interest paid. The CIT (A) did not accept the Form No.15G furnishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thiness of the investor added the amount to the total income. 7. The assessee challenged the addition by filing an appeal before the CIT (A). The CIT (A) after examining the bank accounts of Smt. Indira Golechha found that Rs.27,648 was advanced by her to the assessee after receiving an amount of Rs.21,880 from C.S. Securities on 21-10-05. Similarly she advanced an amount of Rs.1,00,000 on 21-11-2005 after an amount of Rs.98,000/- was credited in her bank account through clearing on 21-9-2005. The CIT (A) therefore found the amount of Rs.1,27,648 as explained. However, so far as the balance amount of Rs.2,90,000 advanced by her is concerned the CIT (A) found that the said amount were advanced after cash deposit of the same amount was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound No.(iii) relates to disallowance of Rs.58,684/- u/s 40A(3) of the Act. Facts of the case are the assessee during the relevant assessment year had paid remuneration of Rs.3,00,000/- to one of the directors. The assessing officer in course of assessment proceeding found that in the immediately preceding assessment year, the assessee had paid an amount of Rs.2,23,755/-. Finding the claim to be excessive the AO restricted the claim of expenditure to the amount claimed for the earlier assessment year. In appeal, proceeding before the CIT (A) the CIT (A) accepted the assessee s claim that the payment made cannot be held to be excessive. However, the CIT (A) found that the entire amount was paid in cash in violation of provisions contained u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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