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2012 (1) TMI 222 - AT - Income TaxTrading addition deleted as relying on previous year of assessee Deemed dividend addition - Held that:- As already held that transactions are of business in nature, therefore, provisions of section 2(22)(e) cannot be applied. In view of these facts and circumstances and in view of the decision of Tribunal in case of sister concern for the same year in which we have held that transactions are business in nature, we uphold the order of ld. CIT (A) indeletingthe addition Addition u/s 40A(3) - Held that:- There is no infirmity in the finding of ld. CIT (A) as the payment to the transporter on each occasion does not exceed ₹ 20,000/-. Therefore, in our considered view, addition under section 40A(3) could not have been made. Accordingly, we confirm the findings of ld. CIT (A) Disallowance of telephone expenses - Held that:- We noted that expenditure incurred under this head is exclusively for the purpose of business. The AO has not pointed out any particular expenses which are not for purposes of business. Looking to the turnover of the assessee and other details kept by assessee, we hold that ld. CIT (A) was justified in deleting the addition. Depreciation @80% on windmill allowed Addition on account of interest expenses - Held that:- The ground taken by the department is wrong as ld. CIT (A) has remitted the matter back to the file of AO to work out disallowance in view of provisions of section 14A of the Act. The assessee has also challenged the finding of ld. CIT (A) by ground No. 11 and 12 in which it has been held that provisions of section14A are not applicable on the facts of the present case. Vehicle running & maintenance expense allowed Disallowance of packaging material expenses Disallowance of legal and professional expenses - Held that:- On perusal of ledger account of legal and professional expenses, it is noticed that the expenditure is incurred on payment of monthly retainership charges to various consultants/professional charges paid for obtaining consultancy/court charges for appearing and arguing the matters at various levels. All the confirmations have been filed. There is no dispute about rendering of services. Therefore, we hold that there is no question of disallowing of ₹ 50,000/- on adhoc basis. Accordingly, we delete the addition. The ground of the assessee is allowed. Addition on account of unverified sundry creditors - Held that:- Assessee deserves to succeed in this ground. There is no dispute about liability of the assessee which is coming from last year. This liability has not been ceased to exist
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