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2016 (1) TMI 1200 - AT - Income TaxInterest disallowance - sufficient interest-free funds proof - Held that:- The CIT(A) records a finding that the assessee had available at his disposal sufficient interest-free funds so as to be advanced without charging interest. This is also not the Revenue’s case that he has diverted interest-bearing funds for any other purposes than that of his business. This has made the CIT(A) to follow Hon’ble Apex Court’s decision in Munjal Sales (2008 (2) TMI 19 - Supreme Court). The Revenue fails in rebutting the impugned crucial findings of facts holding availability of sufficient noninterest bearing funds. We accordingly find no reason to interfere with the CIT(A)’s action in deleting the impugned interest disallowance of ₹ 4,52,089/-. This first substantive ground raised in the Revenue’s appeal fails. Unexplained cash credit addition - Held that:- There is no dispute that the assessee in rebuttal has furnished correct PAN details with Bank account copies, creditors’ confirmations and their Income Tax returns. We find that section 251(1)(a) of the Act no more empowers the CIT(A) to remand a case w.e.f. 01.06.2001. The fact also remains that the assessee has already made out a case for admitting additional evidence before the CIT(A). We observe in these facts that the main reason on the part of the CIT(A) for directing the Assessing Officer to verify the facts once again is because of the fact that the assessee has been able to file complete set of relevant documents only in rebuttal stage. We take into account the bar imposed by the legislature on the CIT(A)’s jurisdiction in section 251(1)(a) hereinabove and interfere to the limited extent that the impugned remand directions shall form part of our instant findings. In other words, we interfere on this legal aspect only. However, we direct the Assessing Officer to re-decide this entire issue afresh after taking into account the material on record submitted by way of additional evidence after affording adequate opportunity of hearing. CIT(A) confirming the impugned unexplained cash credit addition in case of Chandrikaben Thakkar to the tune of ₹ 17,000/- this creditor is neither having any PAN card nor has she been able to explain her source. We find no reason to interfere in the lower appellate reasoning under challenge. The same is accordingly upheld. Undisclosed investment in the cost of construction/land of the residential premises in question known as “Devnandan Palace”, Ambli-Bopal Road, Ahmedabad - AO made section 142A reference to the Departmental Valuation Officer who filed his report on 15.12.2006 ascertaining value of the residential property in question to be of ₹ 1,46,28,300 as on 31.03.2005 as against that shown in books of ₹ 64,51,242/- - Held that:- As decided in Sargam Cinema vs. CIT (2009 (10) TMI 569 - Supreme Court of India) holding that an assessing authority cannot make a DVO’s reference under section 142A without rejecting books. We accept assessee’s argument accordingly and hold that the Assessing Officer’s action in invoking section 142A reference without rejecting assessee’s books stating cost of construction of residential property in question as well as the land appurtenant thereto is not based on any incriminating material found in the course of search or any infirmity being pointed out there. We follow the above stated judicial precedents and delete the entire addition being made in assessment order Addition made on account of excess depreciation - Held that:- The Revenue fails to point out any distinction on facts or law before us so as to reverse the lower appellate finding, upholding the impugned claim of excess deprecation @ 25% on electrical installations with sanitary fittings in assessee’ s Hotel building. This substantive ground is accordingly rejected. Addition made on account of low house hold expenses withdrawal - Held that:- The CIT(A) has already taken into account assessee’s socio-economic circumstances for estimating the impugned household withdrawal thereby restricting the impugned addition from ₹ 25,000/- to ₹ 6,000/- only. There can be hardly any dispute about the settled proposition that wherever two views are possible, the one taken by the CIT(A) is to be confirmed. There is also no factual evidence placed on record either of the parties to rebut the findings under challenge. We accordingly affirm the CIT(A)’s action thereby rejecting the corresponding grounds raised in both these cross appeals. Disallowance @ 20% of the total telephone expenses by terming the same to be involving personal element and non-business use - Held that:- The assessee fails in leading any evidence to prove that he had been using any other telephone or other communication system exclusively for his personal and non-business use. We see no reason to interfere with both the lower authorities’ action in invoking the impugned disallowance.
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