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2017 (1) TMI 949 - AT - Income TaxUnverifiable sundry creditors - AO was of the view that since sundry creditors did not respond to his notices, therefore, these are not genuine and he made the addition - Held that:- No merit in ground of the Revenue’s appeal. The ld. first appellate authority has recorded a finding of fact that sundry creditors doubted by the AO are genuine. The assessee has produced evidence exhibiting repayment of alleged amounts to these concerns. The findings of the AO is not based on any concrete evidence. Therefore, the first ground of appeal is rejected.- Decided in favour of assessee Addition in respect of cash payments made to the parties splitting the amount to below ₹ 20,000/- - violation of provisions of section 40A(3) - Held that:- The disallowance u/s 40A(3) could be made if the assessee has made payment to a person in a day otherwise than account payee cheque or bank draft exceeding ₹ 20,000/-. The ld.CIT(A) has recorded a specific finding that no such payment was made by the assessee. As gone through the finding of the AO also which has been extracted above, but, there is no clear-cut finding discernible from the order of the AO. Therefore,no reason to interfere in the finding of the ld.CIT(A). - Decided in favour of assessee Addition on account of interest corresponding to the amounts outstanding against debtors - Held that:- No merit in this ground of appeal because there is no decision at the end of the AO to assume notional interest income and, thereafter, assume that interest expenses claimed by the assessee to be disallowed. He has not demonstrated any nexus as to how interest bearing funds were diverted for the non-business purposes. The ld.CIT(A) has rightly deleted the addition.- Decided in favour of assessee
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