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2015 (10) TMI 2318 - AT - Income TaxBogus purchase of M.S.Steel from Dhruv Steel - Held that:- The purchases made by assessee were duly supported by various documentary evidences such as inward stamped bills and weigh bridge challans etc. Assessing Officer has not appreciated such evidences, particularly the confirmation of M/s. Dhruv Steel from whom assessee has purchased steel and the fact that if the purchases made by assessee were not genuine, it would not have been able to construct a huge plant of oil, which is evident from the evidences submitted on behalf of assessee. In view of above, CIT(A) held that conclusion reached as to bogus purchase of M.S.Steel in assessment order for AY. 2004-05 was not justified. Accordingly, disallowance made on the basis of observation in assessment order for A.Y. 2004-05 was not justified. We are not inclined to interfere in reasoned finding of CIT(A). - Decided in favour of assessee. Disallowance of the depreciation as being unexplained - CIT(A) deleted addition - Held that:- We have upheld the order of CIT(A) on the issue of genuineness of steel transaction whereby he has held the purchase of M.S. Steel from M/s. Dhruv Steel as genuine for A.Y. 04-05. Accordingly, disallowance made by Assessing Officer in subsequent order on point of depreciation was not justified held by CIT(A). In view of this, addition made in both years of disallowing claim of depreciation of building and plant & machinery was rightly held to be unwarranted by CIT(A) and same was rightly deleted by him.- Decided in favour of assessee. Disallowance of interest expenditure incurred by assessee on loan taken from - Held that:- Source of loan taken by M/s. Vimal Marketing who has received the same from M/s. Dhruv Steel. Assessing Officer should not go into the source of source of loan taken by assessee. In these circumstances, CIT(A) was justified in allowing assessee’s claim of interest expenditure. This reasoned finding of CIT(A) needs no interference from our side - Decided in favour of assessee.
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