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2018 (4) TMI 1128 - AT - Income TaxDisallowance u/s 40A(3) - payments to Truck drivers not under prescribed limit - cash payment exceeding ₹ 20,000/- - Held that:- The assessee has discharged its onus by submitting that the payments at ₹ 9,47,220/- made to other persons was below the prescribed limit mentioned in section 40A(3) of the Act and the ld. DR for the Revenue could not bring any evidence on the report to show that the said amount was paid by the assessee in violation of section 40A(3) of the Act. Therefore, based on the factual position explained above, we delete the addition - Decided in favour of assessee Disallowance of interest on borrowed fund - assessee provided interest free advance to related business entities/concern - sufficiency of own funds - Held that:- Hon’ble Bombay High Court in the case of Reliance Utilities (2009 (1) TMI 4 - BOMBAY HIGH COURT) wherein as held that if there were funds available, both interest-free and overdraft and/or loans taken, then a presumption would be that investments would be out of the interest-free funds generated or available with the company, if the interest-free funds were sufficient to meet the investments. In the assessee’s case presumption was established considering the fact that assessee has its own capital at ₹ 1,23,06,344/- whereas the interest free advances were given to the tune of ₹ 11,41,000/-. As presumed that these interest free advances have been given out of its own capital and hence, no disallowance should be made. - Decided in favour of assessee
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