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2017 (9) TMI 310 - ITAT MUMBAIAllowable business expenditure u/s 37 - Whether expenses incurred in connection of business activity treated as revenue and charged to P&L A/c or treated as capital in nature - proof of business activity - Held that:- In the order of FAA, the findings have been recorded that there were no business activity from the sale and purchases and the activities shown by the assessee does not appear genuine as the sales bills were dated prior to the purchase bills. We also after hearing either sides and after examining the record, are in agreement with the conclusion drawn by the ld.FAA that the sales and purchase were shown in order to claim expenses which are not incurred wholly and exclusively for the purposes of business. At the most the said expenses could be capitalized. Accordingly, we affirm the order of the ld.CIT(A) on this issue.- Decided against assessee. Disallowance of interest expenditure - loan was not used wholly and exclusively for the purposes of business - Held that:- . At the time of hearing the ld. AR filed statements and contentions that the amount of loan is raised for further advancing to its director for business purposes but the same was finally returned by the Director of the company as the said loan was not used for the business purpose. The ld.AR raised the plea that since the money was received back and not used for business purposes, no disallowance was attracted. Thus as the statement produced before us contains the details of advances given on different dates and said statement was not before the authorities below restore this issue to the file of the AO as the matter requires verification and the AO is directed that in case money has not used by the director for any personal purposes and returned to the company as it is,the claim of the assessee is allowed and otherwise decide the allowance as per law and facts. - Decided in favor of assessee for statistical purposes.
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