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2019 (1) TMI 1852 - AT - Income TaxBogus purchases - cash sales for less than purchase price for not producing the proof of payment to supplier - HELD THAT:- The assessee in his written submission has stated that the supplier is local supplier having registered under the MVAT. The assessee has produced before the Assessing Officer and CIT(A), purchase bills, Extract of account, quantity statement and nexus with sale bills etc. It is the contention of the assessee in the written submissions that the Assessing Officer disallowed for the reason that ‘no delivery challan’ and transport receipt were given. The Assessing Officer doubted sales as if cash sales for less than purchase price for not producing the proof of payment to supplier. As perused the case record and written submissions filed by the assessee. Taking into consideration of entirety of facts and circumstances, we deem it fit and proper to uphold the disallowance @20% on the said purchases and Assessing Officer is directed to provide appeal effect accordingly. Hence, ground No.1 of the appeal is partly allowed. Disallowance of commission payment - CIT(A) on the issue has observed that the commission was claimed by way of journal entry at the end of the year - HELD THAT:- We find, it is not disputed by the Revenue that broker or so called dalal, they have shown income in their return and that the assessee has also deducted TDS on such payments. Taking into consideration of entire facts and circumstances, the total disallowance is unjustified and therefore, we restrict the disallowance @20% of the total expenses. Hence, ground No.2 of the appeal is partly allowed. Addition of interest - interest was paid on the loans taken from the banks and on the other hand, no interest was charged on loans given to the sister concerns - HELD THAT:- We find that the CIT(Appeals) stated that nexus of interest free funds is not established and funds are inter mixed. The assessee stated in the written submission that working of interest on interest free funds received and interest on interest free funds advances have been submitted before the Ld.CIT(Appeals) - As per the contention of the assessee is that it has got more interest free funds which are more than the interest free advances made, to meet the ends of justice, we confirm 20% of the said disallowance. Hence, ground No. 3 of the appeal is partly allowed.
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