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2013 (4) TMI 260 - AT - Income TaxInterest claimed on unsecured loan @ 16% disallowed - Held that:- Admittedly, the amount of deposit of JK Paper Ltd. is not a loan but it is a deposit by the distributor to the manufacturing company under selling and distributor agreement which is mandatory to obtain a distributorship. The DR has not disputed this point that the assessee was allowed interest on unsecured loan @16.5% during the earlier two years to the year under consideration. From the statement of bank loan account, it is also observed that the assessee is reasonably maintaining its liquid cash to meet his business requirements. Also from the written submissions of the assessee submitted to the AO it is observed that the assessee is paying 24% per annum interest to M/s JK Paper Ltd. if payment is made beyond 30 days from the date of invoice. This vital point has not been considered by the authorities below - Thus revenue authorities should reasonably follow the principle of consistency until and unless there is a valid reason to take a different view in the subsequent years. Thus addition made in this regard is deleted - in favour of assessee. Disallowance of Car expenses - CIT(A) restricted the disallowance of Rs.68,110 to Rs.30,000 - Held that:- As the appellant has not been able to establish that the car was exclusively used for the business purposes by producing the log book of the car before the authorities below. A part of car expense and depreciation had been disallowed during the preceding years and the same finding has not been challenged by the assessee on any count. Thus addition as partly confirmed by the Commissioner of Income Tax(A) cannot be held as highly excessive and unreasonable. Disallowance of telephone expenses - CIT(A) restricted the disallowance of Rs.24,449 to Rs.10,000 - Held that:- DR has not disputed the fact that the entire telephone expenses have been allowed by the AO during the preceding years to the year under consideration. Thus unable to see any valid reason to make a part disallowance of Rs.10,000 by the CIT(A), thus was not justified and it was made without any reasonable basis. Disallowance of freight and cartage and traveling expenses - CIT(A) confirmed a part disallowance - Held that:- On specific query from the Board, the assessee's counsel admitted that the appellant and her family members made visits to various places and stayed there for many days which was not for business purposes. He has not contended this fact that the appellant has not furnished any specific details of the nature of such visits either before the authorities below or before this Tribunal. In this position, observations made by the CIT(A) be accepted and part disallowance as restricted to Rs.15,000 deserves to be upheld.
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