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2017 (12) TMI 1041 - AT - Income TaxCalculation of disallowance of u/s 36(1)(iii) - Held that:- In the present case also we are of the opinion that Assessing Officer should examine the disallowance keeping in view the case laws relied on by assessee wherein it has been held that on opening balances of advances no disallowance u/s 36(1)(iii) was warranted and similarly in cases it has been held that if the interest free funds of the assessee are more than the interest free advances, no disallowance u/s 36(1)(iii) can be made. Addition u/s 41(1) - Held that:- AR clearly establish that addition u/s 41(1) is not warranted unless the assessee writes off the credit balances of such creditors. Tax was not deductible as the amounts were paid as reimbursement to shipping agents - Held that:- emit this issue to Assessing Officer who should examine the nature of expenses and if the payments made are covered by the provisions of section 172(8) and CBDT Circular No. 723, then Assessing Officer should allow relief thereof. In view of the above ground no. 8 is allowed for statistical purposes. Addition was made u/s 69C on account of certain items jotted in pencil on two sheets of paper which were recovered during the course search and seizure operation. The assessee submitted that the said can not be treated as unexplained expenditure and under these circumstances, the Hon'ble Delhi High Court in the case of Lubtech India Ltd. [2007 (7) TMI 281 - DELHI HIGH COURT] has held that section 69(c) postulates that first of all, the assessee must have incurred the expenditure and thereafter if the - explanation offered by the assessee was not found satisfactory only then the addition can be made u/s 69C of the Act. In the present case also the assessee had denied to have incurred this expenditure and the assessee had been maintaining that such expenditure was never incurred by the assessee and these were not reimbursed to the employees and therefore we are in agreement with the arguments of assessee that addition under these circumstances can not be made u/s 69C of the Act. Disallowance of 1/10th out of vehicle expenses - Held that:- Assessing Officer is directed to delete disallowance on account of depreciation which the Ld. CIT(A) had sustained due to personal use. However as regards other expenses the disallowance sustained by Ld. CIT(A) is upheld. Addition of credit balance - Held that:- We find that assessee at its own had transferred this amount to rebate and discount in the succeeding year and therefore addition during the year under consideration will tantamount to double addition. Deemed dividend u/s 2(22)(e) - Held that:- We find that in the present case also the registered and beneficial shareholders are different than the assessee company
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