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2018 (2) TMI 251 - AT - Income TaxAddition to capital account of partners made u/s 68 - assessee failed to provide the evidence to substantiate the source of capital introduced - Held that:- From CIT(A)'s finding, we find that he has passed a speaking and detailed order whereby he has discussed the explanations and evidences in respect of them with respect to various persons. The learned CIT(A) has made a finding of fact that the creditors had advanced money to the assessee on interest @12% per annum and all the depositors were having PAN & had filed confirmation and therefore, has rightly arrived at the conclusion that the additions were not sustainable and therefore, we do not find any infirmity in the order of CIT(A). In view of the above, ground No. 3 is also rejected. Disallowance of interest on term loan - allowable busniss expenses - Held that:- We find that CIT(A) has made a finding of fact that the assessee was already running a unit and it had installed a new machinery and interest was paid for the loan taken for the new plant & machinery installed in already running unit and therefore, it was not a new business which had come into existence and therefore, proportionate interest relating to the period before start of machinery was an allowable expense. Addition on account of sundry creditors consisting of three parties - Held that:- Assessing Officer during remand proceedings had accepted the explanation in respect of two creditors for which necessary confirmations were filed and in respect of one creditor amounting to ₹ 1,61,885/- he has not accepted the same as the necessary confirmation was not filed and therefore, he had recommended the addition to the extent of ₹ 1,61,885/- only. However, learned CIT(A) has deleted the same also by relying on certain case laws which states that addition of sundry creditors cannot be made u/s 68 of the Act. Revenue appeal dismissed.
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