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2017 (12) TMI 798 - AT - Income TaxDisallowance of vehicle expenses - ingenuity of claim - Held that:- The assessee has not produced the supporting evidence in respect of the vehicle expenses and further expenses were incurred in cash and no log books regarding the use of the vehicle was maintained by the assessee. Accordingly in the facts and circumstances of the case the disallowance restricted by the ld. CIT(A) to 10% of the vehicle expenses is just and proper and does not require any interference. Hence, this ground of the assessee’s appeal is dismissed. Disallowance of interest on advance given to the sister concern - Held that:- Though the assessee has availed the cash credit facility as well as overdraft facility from ICICI Bank on which interest of ₹ 8,24,998/- was paid during the year under consideration however, neither the Assessing Officer nor the ld. CIT(A) has verified this fact that when the assessee is having its own sufficient funds to give advance to the sister concern then without establishing a direct nexus between the borrowed fund and advance no disallowance on account of interest is called for. It is not in dispute that the assessee’s own fund is more sufficient to met the requirement of advance to sister concern. If the assessee’s capital and profit during the year is taken into consideration the same is more than the loan given to the sister concern. Therefore, having regard to the fact that the assessee’s own capital and profit during the year amounting more than ₹ 25,00,000/- then, a presumption can be raised that the advance given the assessee of ₹ 5,61,000/- is from its own fund and not from borrowed fund. Accordingly the disallowance made by the AO is deleted.
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