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2019 (5) TMI 688 - AT - Income TaxDisallowance of interest - notional interest on interest free advances to 5 related parties - sufficient interest free funds - HELD THAT:- As sufficient interest free funds were available with the assessee which were sufficient enough to cover up the interest free advances given to the related parties, in our view both the lower authorities erred in confirming the disallowances of interest of and the same deserves to be deleted. Disallowance of commission payment - for some parties for absence of details, confirmations & rendering of service and on balance @ 50% being excessive - whether commission is paid for the purpose of business of the petitioner and allowable? - CIT(A) reduce the same on @30% - HELD THAT:- For two categories, The finding of the Ld. AO is not specific and seems to be half hearted before making disallowance. When the assessee has placed necessary details and genuineness of the commission expenditure has not been doubted then in such circumstances no disallowance was called for. We, therefore, set aside the finding of Ld. CIT(A) and delete the disallowance of commission made by the AO. Now coming to the third category of disallowance where no details made available by the assessee about the nature and services rendered, the AO issued notice u/s 133(6) of the Act but satisfactory reply was not received. In some cases notice u/s 133(6) could not be served. In the case of Misc. commission expenses no details were filed. Rates of commission also varied from 2% to 15 % but no proper explanation was given. Thus where the assessee is unable to satisfy the lower authorities about commission expenditure claimed, we find no reason to interfere in the well reasoned finding of the CIT(A) disallowing the commission expenditure computed @ of 30% of the commission expenditure - Decided partly in favour of assessee.
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