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2019 (3) TMI 1843 - AT - Income TaxDisallowance of reimbursement of expenses - AR did not improve the case of the assessee in respect of payments made to Manoj Pandey except stating that the disallowance may be restricted to 20% of the expenses as per Section 40A(3), as the payments have been made by way of cash - HELD THAT:- In the instant case, the tax authorities have disallowed the claim of expenditure, since the assessee has failed to prove the same. Hence we do not find merit in the submission of Ld A.R that the disallowance may be restricted to 20% of expenses by following the provisions of Section 40A(3) - Since the assessee has failed to prove the genuineness of expenses incurred on Manoj Pandey, we are of the view that the Ld CIT(A) was justified in confirming the disallowance. Assessee has submitted that the amount paid to Manoj Pandey was only ₹ 19,99,250/-. Accordingly we confirm the disallowance to the tune of ₹ 19,99,250/-. The balance amount has been claimed to have been paid to M/s Sonal Enterprise (₹ 5.00 lakhs) and Shri Krishna P Vaidya (₹ 2.20 lakhs). Since both these payments require examination, we restore them to the file of the assessing officer for examining them. Disallowance made u/s 40(a)(ia) - AO disallowed interest expenses paid on unsecured loans as the assessee failed to prove that due TDS was deducted from the payments - CIT(A) also confirmed the same - HELD THAT:- A.R submitted that the assessee has paid interest to four parties, out of which he has deducted tax at source from the payments made to two parties. With regard to the remaining two parties, the Ld A.R submitted that the payees have declared the income in their respective return of income and hence the benefit of the proviso to Section 40(a)(ia) of the Act be given to the assessee.Since these details require examination, in the interest of natural justice, we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of the AO for examining the claim of the assessee in accordance with the law. Direction given u/s 150(1) by CIT-A - CIT(A) confirmed the disallowance of reimbursement of expenses and also directed further to verify past and subsequent years of ROI filed by assessee to examine whether these expenses have been claimed therein also - HELD THAT:- The scope of finding or direction that can be given by the appellate authority within the meaning of Section 150(1) has been explained by the Hon'ble Courts. In the case of Peico Electronics and Electricals Ltd. [1992 (1) TMI 18 - CALCUTTA HIGH COURT] observed that though the powers of the First Appellate Authority are co-terminus with that of the AO and has powers to enhance the assessment but that is confined to the assessee and a finding or direction, while disposing of the appeal, must be a finding necessary for giving relief in respect of the assessment year in question. In the instant case, we notice that the impugned directions given by Ld CIT(A), which are extracted above, were not at all necessary for disposing of the issue before him and accordingly, we are of the view that the Ld CIT(A) was not justified in giving the above said direction. Accordingly, we set aside the same.
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