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2017 (3) TMI 525 - AT - Income TaxDisallowance of job work expenses - payment of expenditure in cash - Held that:- All the bills contains the description of work done, though in short form, as per the trade practice and custom of the assessee trade. So far as the payment in cash is concerned, the same was made within the permissible limits of Section 40A(3) of the Act. We have given a careful consideration to the matter and we are of the view that the assessee’s contention deserves to be accepted. Firstly, the addition has been made on purely an adhoc basis without highlighting any specific instance where the payment is not verifiable or the expenses claimed by the assessee are bogus or have not been incurred for the purpose of business. Further, no specific instance of cash payment has been highlighted which has violated the provisions of Section 40A(3) of the Act. Thus we hereby delete the disallowance - Decided in favour of assessee Excess interest paid disallowance - Held that:- The rate of interest on borrowing need to be benchmarked with the third party transaction in the similar facts & circumstances of the case. In the instant case, what is being compared is a rate of interest on an unsecured borrowing vis-à-vis a secured borrowing. In absence of a comparable case being highlighted by the Assessing Officer, we are unable to accept the stand of the revenue that the interest paid is on a higher side. In light of above, the ground No.2 of the assessee is allowed. - Decided in favour of assessee
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