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2023 (3) TMI 821 - AT - Income TaxDisallowance u/s 37(1) on account of advertisement expenses - Addition being expenses for non-business purpose - HELD THAT:- Assessee could not prove how the said advertisement expenditure is wholly and exclusively for the purpose of the business. AR could not rebut the fact that during the assessment proceedings, it was accepted by assessee that he is unable to substantiate and therefore agreed for the addition. Expenditure incurred on advertisement was not wholly and exclusively for the purpose of the business of the assessee. Decided against assessee. Disallowance u/s 36(1)(viia) - AO observed that assessee was not having any Rural Advances, therefore, held that assessee was not eligible for deduction u/s 36(1)(viia) - HELD THAT:- As decided in assessee own case [2020 (3) TMI 687 - ITAT PUNE] assessee without rural branches / advances, is entitled to deduction u/s 36(1)(viia) of the Act. Decided against revenue. Disallowance u/s 40(a)(ia) r.w.s 194A - interest income earned by minor and partnership firm - HELD THAT:- No specific submission has been made vis-à-vis interest paid to unregistered firm. As per the bylaws of the assessee, unregistered firm and minor are not eligible to be members. As per proviso to section 194A exemption is granted only to the members in case of co-operative societies. In the case of the assessee, it is an admitted fact that minors and unregistered firms cannot become members of the society. Thus, assessee had paid interest to minor and unregistered firms who were not members of the assessee. This is violation of section 194A - we are of the opinion that the AO has rightly invoked provisions of section 40(a)(ia) of the Act and disallowed interest paid to minor and unregistered firm hence, the said addition is confirmed. Decided against assessee.
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