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2017 (5) TMI 632 - AT - Income TaxBogus purchases - Held that:- As decided in assessee's own case for previous AY 2010-11 AO made addition without any basis and the Id. CIT(A) after proper consideration of facts and circumstances and after allowing opportunity to present their respective stands to the A.O as well as to the assessee dismissed the disallowance and there was no reason to disallow interest to the companies from whom the purchases were made. Consequently, we are unable to seen any ambiguity, perversity or any other valid reason to interfere with the impugned order and thus we uphold the same - Decided in favour of assessee. Disallowance of loss on bogus trading - Held that:- Since we have held that the purchases made from Colourshop Trading Co. Pvt. Ltd. and M/s Induja Traders Pvt. Ltd. are not bogus purchases, the sales made out of such purchases cannot be treated as bogus sales. It is ordered accordingly. Disallowance of interest paid to Hawala operators - Held that:- The AO, in the previous year, when the loan was received had not disallowed same as not genuine, having not disallowed the principal as not genuine, there is no justification for making any disallowance of interest paid to the above parties. It is also relevant to mention that interest was paid to above mentioned parties for the Assessment Year 2010-11. For identical reason the Assessing Officer had disallowed the interest paid for A.Y. 2010-11. The disallowance made by the Assessing Officer for Assessment Year 2010- 11 was deleted by the CIT(A) and same was confirmed by the Tribunal. Thus we hold that the Assessing Officer is not justified in disallowing interest paid.
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