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2014 (10) TMI 474 - AT - Income TaxProportionate interest expenses – Expenses made for implementation of new project which could not take off – Held that:- ₹ 5.44 crores was given as an advance to Subham Appliances for the new project of the Assessee - the project could not be implemented and the amount advanced was returned back to the assessee in subsequent year - CIT(A) while deleting the addition has given a finding that the inter corporate deposits advanced by the Assessee were recalled during the year and it was the source of advance - AO has not established the nexus between the borrowed funds and the advance given to Subham Appliances to prove that the money has been advanced out of borrowed funds - assessee has submitted that Subham Appliances is not a related party, the transaction has not been doubted and the advance was for the business purpose - revenue could not controvert the findings of CIT(A) and there was no reason to interfere with the order of CIT(A) – Decided against revenue. Publicity and advertisement expenses – Held that:- AO while disallowing the expenses has noted that the various details like address, PAN No, copies of the invoices were not furnished by the Assessee and therefore the genuineness was not proved and therefore the expenses were disallowed by AO - CIT(A) has noted that various details like copy of the advertisement contract, copy of bills and other material were furnished before him and after considering the evidences submitted before him, CIT(A) deleted the addition - nothing has been placed on record to demonstrate that on the additional evidences that were submitted by Assessee before CIT(A), any remand report was called from AO - the AO should be granted an opportunity to examine the additional evidences which were submitted by Assessee before CIT(A) – thus, the matter is to be remitted back to the AO for fresh adjudication – Decided in favour of revenue. Sales promotion expenses disallowed – Held that:- AO while disallowing the expenses has noted that no details were furnished by the Assessee nor has the Assessee proved that the expenses crystallized during the year - CIT(A) has noted that before him the Assessee has filed the details of expenditure in respect of which the bills were received after the end of the relevant period and therefore the liability crystallized - there are no details of the nature of expenses in the order of CIT(A) nor the details of the expenses have also been placed – thus, the matter is to be remitted back to the AO for fresh adjudication – Decided in favour of revenue. Deduction u/s 80HHC – Held that:- As decided in assessee’s own case for the earlier assessment year, it has been held that the balance amount of miscellaneous income is business income and hence should not be excluded from the profit of business for the purpose of calculation of deduction u/s 80 HHC – Decided partly in favour of revenue.
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