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2015 (10) TMI 1880 - AT - Income TaxDisallowance of interest paid - in-genuine loans - Held that:- It is already observed that the loan is not genuine in earlier assessment years. When the principal loan itself is not genuine, there is no question of allowing of any interest on such non-genuine loan. Being so, disallowance of interest on on-genuine loan is justified. Regarding the disallowance of interest on the unsecured land utilized for the purchase of land, in our opinion, the interest incurred upto the date of sale deed registration of the land to be considered as capital expenditure, if it is treated as capital asset by the assessee and to be added to the cost of the land and interest incurred after the purchase of the land to be considered as revenue expenditure. On the other hand, if the land is treated as stock-in-trade, the entire interest on the loan used to purchase the land to be treated as revenue expenditure if the loan is genuine. With this observation, we direct the AO to reconsider the issue. - Decided partly in favour of assessee. Disallowance of sub-contract expenses u/s.40(a)(ia) - AO noticed that the assessee has neither deducted any TDS as per the provisions of sections 194A and 194C of the Act, nor remitted to the Govt. of India as on 31.03~2008 - Held that:- Similar issue was considered in the case of Shri N. Palanivelu v. ITO (2015 (10) TMI 1415 - ITAT CHENNAI), wherein held that sec 40(a)(ia) is not applicable when there is no outstanding balance at the end of the close of the year relevant to the assessment yea in respect of these payment. However, the assessee has not brought on record, the details of outstanding expenses or schedule of sundry creditors showing whether the impugned amount is outstanding at the end of the close of the previous year relevant to the assessment year either in the name of the party or outstanding expenses. Hence, in the interest of justice,we are remitting the issue back to the file of the Assessing Officer with direction to verify the claim of the assessee and the assessee shall place necessary evidence in support of his claim. - Decided in favour of assessee by way of remand.
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