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2014 (8) TMI 752 - AT - Income TaxDisallowance of interest expenses - Held that:- AO had disallowed interest expenditure that the assessee had advanced IFL of ₹ 2. 70 Crores to APL, that it had paid interest to the partners on the debit balance, that certain pieces of information were given by the assessee during the appellate proceedings only, that before the AO it was admitted that it did not have business relation with APL, that the AO had agreed with the assessee that the loan given to APL was because of business expediency, that the FAA had partly deleted the interest expenditure and had partly upheld the order of the AO - the assessee itself had stated during the assessment proceedings that there was no business connection with APL - without affording a chance to the AO to rebut/confirm the stand of the assessee, the FAA had given relief to the it He has given certain calculation as on 31. 03. 1997and 31. 03. 2007 for part disallowance of interest expenditure - AO did not have benefit of the submissions of the assessee made during appellate proceedings - the matter needs further verification, thus, the matter is remitted back to the AO for fresh adjudication Decided in favour of Assessee. Registration expenses deleted Held that:- FAA had not deleted the addition of ₹ 10.22 lakhs, as mentioned in the ground of appeal - While deciding the appeal the issue before him was the expenditure of ₹ 7.87 lakhs only - Out of the total expenditure of ₹ 22. 29 lakhs, incurred by the assessee, the foreign principals had reimbursed ₹ 14.42 lakhs - the commission income received from sale of products supplied by the foreign suppliers was offered to tax by the it - the expenditure was incurred wholly and exclusively for business purposes - an increase in the expenditure cannot be basis for disallowing it - Without registration of the product with appropriate authority at Delhi, it was not possible for the assessee to earn income - payments made under the heads consultancy fees, bank charges and other expenses cannot be held to be not incurred for the business for year - All the expenses had direct nexus with earning of the income offered for taxation - Genuineness of the expenditure is not in doubt and the assessee had also deducted tax at source on those payments - the FAA was justified in deleting the addition of ₹ 6. 22 lakhs Decided against revenue.
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