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2014 (7) TMI 1184 - AT - Income TaxDisallowance of interest claimed on personal loan - Held that:- There was no payment of interest on personal account. The interest of ₹ 57,330/- was paid on C.C. Limit utilization for assessee's business. Therefore, the ld. CIT(A) has rightly deleted this addition. - Decided in favour of assessee Disallowance u/ 40A - payment of interest to unrelated party was at 6% whereas the assessee paid interest @ 18% to the relatives. - Held that:- There is some merit in the arguments of the ld. DR to this effect. The assessee has not disputed in paying interest @ 6% to Shri Bhagat Ram Darak and unrelated party.These borrowings from bank carries rate of interest at 15%.The AO adopted the rate of interest at 15% taking into consideration the higher rate of interest on bank loan. Since the AO has discharged his burden in terms of Section 40A(2)(b) of the Act, we find no infirmity in the order of the AO. Therefore, the rate of interest @ 15% payable to related party is reasonable in terms of Section 40A(20(b) of the Act. Hence, we uphold the order of the AO on this issue and reverse the order of the ld. CIT(A). - Decided in favour of revenue Addition in respect of paddy yield - Held that:- The AO has recorded a finding that assessee's books are examined on test check basis. When the books are accepted then the yield cannot be estimated without any material. It is a known fact that depending upon the machinery, quality of the seeds, moisture in paddy, monsoons etc. marginal fluctuation in yield is allowable. Therefore in the absence of rejection of books of account, the yield cannot be estimated. Besides, the AO at the most could have considered the addition on account of valuation of stock in case it was found that qualitywise day-to-day production was not maintained by the assessee deliberately. This is not met out by the AO. In view thereof, we find no infirmity in the order of the ld. CIT(A) deleting the addition in respect of paddy yield.- Decided in favour of assessee
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