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2021 (8) TMI 1097 - AT - Income TaxDisallowance u/s 37 (1) - AO has disallowed 10% of the expenses on ad-hoc basis claimed under the head ‘telephone expenses’, ‘travelling expenses’ and ‘staff welfare expenses’ on the ground that element of personal use cannot be overruled as no logbook was maintained for Vehicles, details of phone calls was not maintained in respect of telephones and proper vouchers of tour and travel expenses were not maintained - HELD THAT:- In our opinion, the Assessing Officer is not justified in making ad-hoc disallowance out of expenses without pointing out specific error or absence of particular voucher of expenses - Tribunal in identical circumstances has upheld the deletion of such disallowance. Respectfully, following the finding of the Tribunal in the case of the assessee in immediately preceding assessment year, we uphold the finding of the Learned CIT(A). The ground No. 1 of the appeal of the Revenue is accordingly dismissed. Disallowance u/s 14A - CIT(A) deleted the disallowance in view finding of his predecessor and no exempt income earned by the assessee - HELD THAT:- We find that the Ld. CIT(A) has deleted the disallowance relying on the decision of the Hon’ble Delhi High Court in the case of Cheminvest Ltd [2015 (9) TMI 238 - DELHI HIGH COURT]. We do not find any error or illegality in the finding of the ld. CIT(A). Accordingly, the grounds No. 2 & 3 of the appeal of the Revenue are dismissed. Disallowance of interest expenditure related to interest free advances u/s 36(1)(iii) - AO observed that building was put to use in the year under consideration and interest on money borrowed corresponding to the period for which the building was not put to use was computed - HELD THAT:- As assessee has already transferred the interest to preoperative expenses which has been allocated to fixed assets. The facts in the year under consideration are identical to assessment year 2010-11 [2019 (1) TMI 1062 - ITAT DELHI] thus, respectfully following the finding of the Tribunal (supra), we uphold the deletion of the addition by the Ld. CIT(A). The ground No. 4 to 6 of the appeal are accordingly dismissed.
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